OwnHome .... Opinions

RisingJoe

Ok,

Seeing as there now seems to a be a few people looking into the OwnHome scheme (including myself) can people give their views / opinions of how it works and how it will pan out in the longer run?

Im 23, looking to buy (at end of this year) and think this scheme may be beneficial to me.

The way i see it, you find a house for say 100k, the Own Home scheme will contribute the "deposit" so to speak, between 20 - 40% so leaving £60-80,000 to come from savings / mortgage company.

After 5 years they start charging interest at 1.75%, then after 5 further years it rises to 3.25%?

so a 20k "OwnHome" deposit would acrue £350 interest a year @1.75% or £650 @3.25%?

thisis only my understanding so please correct me if im wrong (not big with percentages etc)

Can this "Own Home" help be repaid gradually during the first 5 years? or does it have to be paid off in full?

(if i was able to make small payments gradually over the 5 years to help decrease the loan i would then be in a better position to take on the extra debt after 5 years)

??? can anyone with or thinking about applying to OwnHome help?

owen1978

Hi there,

I applied for the ownhome scheme back in Nov 08, after months of waiting, had an interview with them in Feb 09 and got accepted. But by then i had managed to save up a decent wedge and have decided to go it alone.

The Ownhome scheme is not ideal, but its better done nothing, if i didnt have a deposit i would have gone with it.

Couple of things to note;

They pay you a deposit! - This is not a share scheme, you own 100% of your Home.

They borrow you 20-40% of the value of the property this point in time, after 5 years you can pay back 20-40% of the value of the house in that point in time.

So, E.g Borrow 20% on 100,000 = £20,000

If in 5 years time you house still equals 100,000 then you pay back £20,000

If in 5 years time you house equals 200,000 then you pay back £40,000

I think when i spoke to the advisor, you can buy 5% back from the 5th Year. Also to note you can pay them back the entire loan from the 3rd Year.

The ideal scenario i worked out in my head, was to borrow the least, and try to pay it back by Year 3 - by then hopefully House prices have not shot up by huge amount, so you pay them back their original loan amount and maybe just a little on top.

Its better than the Homebuy scheme, where i understand that they own a share in your property and that you have to pay them rent!!!

RisingJoe

Ok,

So if they had a % Stake in your property and it devalues what is the situation? do you still ow them 20% of the end value of the origional 20% value?

I.e

Buy house now for 100k, thye stump up 20k

5 years time its only worth 50k would i owe them 10k or the origional 20k?

owen1978

I dont know really, didnt ask them that, as that scenario happening
is highly unlikely.

fogma

RisingJoe wrote: »

Ok,

So if they had a % Stake in your property and it devalues what is the situation? do you still ow them 20% of the end value of the origional 20% value?

I.e

Buy house now for 100k, thye stump up 20k

5 years time its only worth 50k would i owe them 10k or the origional 20k?

you'd pay them 10k