Opinions on this...

poppysarah

jamief wrote: »

EDIT: Also I think you'll find the deposit that most people use is formed from the equity in their current property.

But you claim to be on good salaries so why haven't you saved as well?

It's not a bad idea to save up cash even if you earn a lot.

Life can change suddenly. Can you cope with a huge mortgage on one salary if you had to?

jamief

We're pretty decided on moving - if we don't get £25k from equity, then we'll still sell. With next door selling for £140,000, attaining £135,000 is reasonable imo. The balance on the mortgage is about £113,000, meaning we'd come out with between £20,000 and £27,000.

We also don't pay legal fees due to my fianc!es profession, and get a big discount on estate agency fees.

Also - unless I'm reading the scheme completely wrong - we do own 100% of the house. There is no shared ownership - 75% is mortgaged, the other 25% forms a loan between us and Miller Homes. This, unless I'm wrong, means we own 100% of the house.

jamief

poppysarah wrote: »

But you claim to be on good salaries so why haven't you saved as well?

It's not a bad idea to save up cash even if you earn a lot.

Life can change suddenly. Can you cope with a huge mortgage on one salary if you had to?

We've just paid off loans we had when we were students, a graduate loan my fianc!e had to take out to do her diploma, saved £9000 for our wedding in March and redecorated the house. I'm not really sure what your point is.

poppysarah

In ten years time what if you decide you'll remortgage to pay off the loan but the house isn't worth as much as you need it to be?

What if you sell the house but can't afford to clear your mortgage and payback a 25% loan (Is the 25% fixed at 25% of it now, or when you sell?)

Cat695

jamief wrote: »

Also - unless I'm reading the scheme completely wrong - we do own 100% of the house. There is no shared ownership - 75% is mortgaged, the other 25% forms a loan between us and Miller Homes. This, unless I'm wrong, means we own 100% of the house.

Its shared ownership simple as that......thats how you SHOULD see it and how your mortgage company will see it....don't fall for this loan rubbish

jamief

Its 25% of the price when we sell, so if the value goes down, so does what we repay.

I guess I'm just not really seeing the drawbacks of it - we love the area; settling there for 5 years+ is definitely something we like the idea of. Under this scheme, we could get a bigger house than we could afford normally. In 5 years, if we decide to sell, we simply pay back the mortgage company what we owe them and Miller Homes get 25% of the sale price. If we stay for the full 10 years, we would have made sure to save up the 25% required to payback Miller, or remortgage to cover it. I don't see any big drawbacks?

Cat695

jamief wrote: »

Its 25% of the price when we sell, so if the value goes down, so does what we repay.

I guess I'm just not really seeing the drawbacks of it - we love the area; settling there for 5 years+ is definitely something we like the idea of. Under this scheme, we could get a bigger house than we could afford normally. In 5 years, if we decide to sell, we simply pay back the mortgage company what we owe them and Miller Homes get 25% of the sale price. If we stay for the full 10 years, we would have made sure to save up the 25% required to payback Miller, or remortgage to cover it. I don't see any big drawbacks?

ok do your sums on saving 60k in 10 years with the current interests rates.....you might as well have paid for 100%......house prices will recover eventually so you could find yourself having to save MORE

Your heart is ruling your head.....

jamief

As I said, I really don't think we'll still be there in 10 years (in fact, I'd go as far to say we won't, we'll probably live in Edinburgh in 10 years).

Meaning, we would sell, and would only pay back 25% of whatever we sold it for.

My heart certainly isn't ruling my head - we've got to sit down and look at a lot of figures, dates etc, other options. I'm just trying to see if there is anything I've missed. Thanks for the replies.

poppysarah

jamief wrote: »

Under this scheme, we could get a bigger house than we could afford normally.
I don't see any big drawbacks?

If you can't normally afford it then it indicates that this scheme is twisting things to allow you to.

They don't call them schemes for nothing.
A systematic plan of future action; A plot or secret, devious plan; An orderly combination of related parts; A chart or diagram of a system or object; A type of topological space; To plot, or contrive a plan for something
en.wiktionary.org/wiki/scheme

jamief

poppysarah wrote: »

If you can't normally afford it then it indicates that this scheme is twisting things to allow you to.

They don't call them schemes for nothing.
A systematic plan of future action; A plot or secret, devious plan; An orderly combination of related parts; A chart or diagram of a system or object; A type of topological space; To plot, or contrive a plan for something
en.wiktionary.org/wiki/scheme

Yes, clearly the scheme is "twisting things" - given that we aren't going to stay for the full 10 years, I don't necessarily think it is a bad thing. Thanks again for the replies. We're going back to view some more plots at the weekend, and then speaking to some colleagues of my fianc!e.