MyChoice HomeBuy Funding Fully Allocated For 2008

Chris2685

Yeah, crazy isn't it

But that's South East prices for ya I guess.

dopester

Chris2685 wrote: »

A 40k saving on what we would have paid, and a 60k saving on the asking price at the time, and an 80k saving on the asking price a couple of months before that time.

I don't think I'll ever earn 80k tax free in such a short space of time

Going with the lower amount of your saving, lets say you were to get a mortgage for just £40,000 pounds. How much in total do you repay over the lifetime of a 25 year mortgage?

For a repayment mortgage, lets average the rate as being 4% over 25 years. I calculate your total repayment obligation on £40,000 would have been:

At 4% over 25 years, your total repayment obligation: £213 per month.
= Total £63,900 over 25 years to repay.

So £40,000 borrowed + would have required you to repay it back as well as an additional £23,900 on interest. That saving you can now in turn be putting away towards a better standard of living, spending on children, investment or towards longer term plans retirement.

At 5% over 25 years, your total repayment obligation: £237 per month.
= Total £71,100 over 25 years to repay. The £40K extra you would have had to borrow if you'd gone ahead + £31,100 for you to find in extra repayments for the interest over 25 years.

Chris2685

Even more savings then

Although, to be honest it doesn't quite work so rosily over a long time period, as I am still paying rent and would still prefer to be paying off a mortgage at the same rate I am paying rent, at least I would have something to show for it after 25 years. But your methods certainly work for a short time, and especially in the falling market we are currently in!

dopester

Chris2685 wrote: »

Even more savings then

Although, to be honest it doesn't quite work so rosily over a long time period, as I am still paying rent and would still prefer to be paying off a mortgage at the same rate I am paying rent, at least I would have something to show for it after 25 years. But your methods certainly work for a short time, and especially in the falling market we are currently in!

Yes that is true. Lets say the asking price of the home you were going to buy drops another £40K, whilst you continue to rent. And similar homes in areas you would consider buying in do the same.

So £80K off the capital purchase value you originally nearly bought at.

Over 25 years @ 4% or @5%... well it subsidises your rent at least a couple of years in having waited for the asking prices / house values to fall to those lower levels.

dopester

Following the original post by Chris

We're stranded as HomeBuy cash runs out
James Coney, Money Mail
13 May 2009
Reader comments (7)

Desperate first-time buyers have been left stranded after cash promised in a government housing scheme suddenly dried up.

A Money Mail investigation has revealed that thousands of teachers and NHS workers have had their home-buying dreams extinguished after being told cash pledged for a shared-ownership scheme was no longer available.

Many were days away from buying their first property, having spent hundreds of pounds arranging a mortgage and paying for surveyors and solicitors.

more here:
http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=484865&in_page_id=8

I'll be glad to see the end of these bribes to make younger buyers overpay for their homes.

Regretting you didn't buy via HomeBuy Chris?

Chris2685

Oh yeah, I regret it like I regret not jumping off a cliff onto a sharp spike

The stress those people must be feeling must be awful, the stress of them keeping us in the dark was one of the major contributing factors to us pulling out...

Several people hurt here - the seller thinking they had finally sold their property, the buyer hoping they were going to be able to buy (but in reality they are actually lucky it has fallen through, probably won't realise it though), and the poor poor estate agent won't get their fee, and neither will the poor poor broker...

Chris2685

It's under offer again it seems!!

dopester

What a yawn. It's still for sale: POA.

Think it's been relisted recently. [Property Bee: 17 March 2010. Initial entry found.]

http://www.rightmove.co.uk/property-for-sale/property-25240789.html

dopester

Damn right I am... The property I was going to buy was immediately reduced to £219.500, still nearly 10k more than we agreed to pay back in July. It is still sat on the market now.

Chris2685 wrote: »

That house is now down to 200k asking price... Tempting to ring and offer 150k to see what they say, but the flat we're renting is much nicer than that house was anyway

Pretty glad we didn't pay 210k for it afterall! This price reduction is nearly our (would have been) deposit down the drain, probably all of it considering what they will potentially accept as an offer for the house...

It sold for £178,000 in the end. £42,500 less than you'd originally agreed to buy it for when you first put your offer in, 'helped' by an arrangement to borrow from "MyChoice HomeBuy." Scheme should be called "Sellers Glory, HomeOverPay".

That capital saving alone, (forgetting the extra mortgage interest on the extra £42,500K you could have paid over the lifetime of a mortgage) more than covers your rent in a much nicer place for a few years.

Even the £32,000 saving from not buying after the seller made the first cut in asking price will absorb your rental costs in a nice place for a good few years - without worry about you paying for the boiler, house insurance, and any other repairs during those years.

Just keep on waiting for the next round of price cuts - plenty of other properties, loads more coming to market, and less and less credit and money out there to pay sellers hopeful asking prices.

Sale Date: 28/08/2009
Price: £178,000
http://www.houseprices.co.uk/holtspur-avenue-wooburn-green-high-wycombe-hp10/

If you'd gone ahead and bought it at £229,500 as you originally were set to do, would you still have been grateful to HomeBuy for their lending assistance to pay the over-inflated asking price?

Chris2685

Thanks Dopester, I guess this really caught your interest for you to look it up

I am very glad indeed that we didn't go ahead with this purchase, expecially because now that I look at it, it really was a poo hole at that price!

It still is sour point that a lot of my income goes to rent instead of buying our own place outright, but still as you say - I have spent a lot lot less in rent than I have in the reduction of that house!