HomeBuy Direct Scheme - is it for me

coleman01

Hi,
I wondered if I could ask your advice.

I am a first time buyer and am looking to buy a home and finally leave home. I have found a nice apartment for £110,000, but, as a teacher I cannot afford a mortgage outright. I have about £5,000 saved up as a deposit so far.

Miller Homes (the property developer) have offered me the HomeBuy scheme from the government, where I take a mortgage for 70% and I own 100% of the property. I then have a interest free loan for the other 30% of the mortgage for 5 years by the government.

After the 5 years, I then start paying interest. If I sell the property - they take the 30% of the current market value of the property - even if it rises or falls below the original buying price. I also understand that I can "staircase" and pay amounts off towards the 30% over time if I wish.

This is my understanding of it, but wondered whether it was worth doing? A few friends think it is really worthwhile, whilst others warn not to go anywhere near it and just wait till I have a bigger deposit.

I wondered if anyone has any experience in this Government HomeBuy direct scheme and could offer some advice or things to think about before doing it?

Thank you so much.

thriftymomma

I think in the current climate you are better off waiting a year or two and saving a bigger deposit. Rather than owning 70% of something that is dropping in price.

Mini_Bear

I agree with thrifymomma
In years gone by teachers were well paid and able to afford a comfortable home in a safe part of town. Due to government ponzi style "homebuy schemes", these are designed to keep prices at artificially high levels, teachers like yourself now can only afford to live in poorly built flats which will not be standing at the end of their lease (99 years+).
OP please consider waiting and saving more for your home, despite recent property ramping by the government and the BBC there really isnt any "green shoots" when another million people are expected to be made redundant this yr.
My advise, save hard and buy a small house rather than a flat (do you want to pay a management fee and ground rent every year?)