Ownhome

michaelkav36

Hi i am looking at buying a first house with my girlfriend. I am currently a postgrad architecture student and have 1 year left at uni, my girlfriend is self employed and owns a business. I have come accross the ownhome scheme by the cooperative which is backed by the government. Has anyone any views on this product, ie got one, applied for one etc. Any feedback would be great. we currently have about £10k saved between us for a deposit, and im working part time at the moment which will be full time in the summer. thanks again

link to product
http://www.ownhome.co.uk/servlet/Satellite/1213946567253,CFSweb/Page/CFSCtplBlank

paulfaz

This is unbelievable, I wouldn't say it's backed by the government exactly, rather Places for People - the biggest housing association there is.

The Ownhome loan could enable you to own a home worth up to 40% more than you could afford with just a conventional mortgage. For example, you could buy a home worth £200,000 with a mortgage for only £120,000. In effect the Ownhome loan from Places for People tops up the amount you can borrow on The Co-operative Bank mortgage.


It says it isn't shared ownership but it's pretty close if you ask me. I really cannot believe in this current climate a 'government led initiative' are trying to get you to borrow more than you can afford.

Why are you looking at this option?- it seems to me it's for people who have seen there dream house, can't afford it, but want it anyway.

michaelkav36

Thanks for your reply, it was VERY constructive?

michael1983l

This is not quite true Paul. Places for people are fronting the money, if you get repossesed then Co-op take their share long before places for people. This scheme is directed at people who cannot raise a deposit as first time buyers. I have been accepted and been told I need to raise 90,000 on my mortgages and they will add 20-40% for the rest. Effectivly a deposit. You pay them back when you move on out of the equity of the house, regardless of how much its worth at the time you pay the share they invested so 20-40% of current value.

This is the best scheme for most people as you do not pay them interest for 5 years and even after it is lower than the mychoicehomebuy scheme.

In 5 years when your own equity is built into the house then you get a re mortgage for the rest of the property. Simple and effective.

getmore4less

michael1983l wrote: »

In 5 years when your own equity is built into the house then you get a re mortgage for the rest of the property. Simple and effective.

That wlll be from overpaying then, chances are you will not see big rises over the 5 years.

If you have to buy out at the same % at current value you are chasing a biigger debt if prices rise.

Even if prices do rise to be in a position to buy the full equity on a 1/3,2/3 split prices would have to double and you double you debt.

If you can buy out at a lower price if they drop then these are a good deal for those that can afford more just keep some back for later.

michael1983l

getmore4less wrote: »

That wlll be from overpaying then, chances are you will not see big rises over the 5 years.

If you have to buy out at the same % at current value you are chasing a biigger debt if prices rise.

Even if prices do rise to be in a position to buy the full equity on a 1/3,2/3 split prices would have to double and you double you debt.

If you can buy out at a lower price if they drop then these are a good deal for those that can afford more just keep some back for later.

It is not overpaying, because Ownhome say I need a minimum mortgage of 90,000. The co-op say they potentially would lend on my wage 133,000. If I take a mortgage of 90,000 I am not overpaying.

It is simply a way to get on the ladder without a deposit. For a 15% deposit it would take me 10 years to save that whilst paying private rent whilst I save. I could effectivly have paid nearly half of my mortgage in this time.

The scheme is essential for people like me to get on the property ladder, without schemes like these I have no chance.

getmore4less

michael1983l wrote: »

It is not overpaying, because Ownhome say I need a minimum mortgage of 90,000. The co-op say they potentially would lend on my wage 133,000. If I take a mortgage of 90,000 I am not overpaying.

It is simply a way to get on the ladder without a deposit. For a 15% deposit it would take me 10 years to save that whilst paying private rent whilst I save. I could effectivly have paid nearly half of my mortgage in this time.

The scheme is essential for people like me to get on the property ladder, without schemes like these I have no chance.

you missed the point.

If prices stay flat you need to overpay to build up equity to buy out the share.

If prices rise so you build up some equity the next move will be sideways.

either way you get stuck on the bottom rung of the ladder for quite some time.

Positive is once the interest kicks in it is like cheap rent.

Anyway why not wait another year or five and let prices drop some more.


Remember it is the current low interest rates that make buying look more attractive than renting. Gross rental yield is a good indicator of value when buying.

michael1983l

The market has bottomed out mate, the Sold signs are flying up in our area and the bottom end of the market is booming. Every estate agent has gone into meltdown here. 5 viewings in 5 days on the market and houses are being sold within 2 weeks here. I am not overpaying at all. Even if my house price drops, so does the equity I need to pay back to places for people for their share.

Squish_21

michael1983l wrote: »

The market has bottomed out mate, the Sold signs are flying up in our area and the bottom end of the market is booming. Every estate agent has gone into meltdown here. 5 viewings in 5 days on the market and houses are being sold within 2 weeks here. I am not overpaying at all. Even if my house price drops, so does the equity I need to pay back to places for people for their share.

Haha! Where do u live exactly? Cloud 9?

michael1983l

Squish_21 wrote: »

Haha! Where do u live exactly? Cloud 9?

Houses in the bracket below 160k here are spending 2 weeks on the market. I guess your just letting the papers make your opinion for you, but bear in mind I am actually searching for a house in this range and everytime I find a property it is sold before I make a bid.