Homebuy - no deposit?

vicshippers

Am I missing something big here or is the claim of 'move into a new home with no deposit' utter rubbish. Surely you still need to get a deposit for the 70% mortgage that you're taking on?

I would LOVE to be wrong on this BTW...

sgh1976

The deposit is the HBD Loan.

For example the house I am currently in the process of trying to buy is £134,950. I have been given the 30% loan so my mortage from RBS will (if accepted) be for 94,645 (or something close to that, can't remember the exact figure).

The thing to remember though is the 30% deposit given to you does have to be paid back eventually

vicshippers

So, for a £145000 property I would need to get a mortgage of £101500 - no saving to get a deposit at all?

Then when the interest free period is up (ideally) I would have to pay back the 30% to the HA/developer.

sgh1976

vicshippers wrote: »

So, for a £145000 property I would need to get a mortgage of £101500 - no saving to get a deposit at all?

Then when the interest free period is up (ideally) I would have to pay back the 30% to the HA/developer.

The only savings you need are £1500 you have to have to prove you can pay for legal fees/reservation fee

The 30% or whatever you are awarded doesn not have to be paid for the first 5 years. Then you pay interest on the loan. The full back can be done over time or when you sell the property.

vicshippers

Thanks sgh1976 - that's really helpful, I had it all wrong!

poppy10_2

Shared ownership is a scam, though. Avoid.

Jenna

Poppy - as far as I know, Homebuy are a government backed Housing Association. Why do you say that's a scam? Or are you just talking in general re shared ownership schemes?

sgh1976

poppy10 wrote: »

Shared ownership is a scam, though. Avoid.

Care to share why you think a Government run scheme to help people get on the property ladder is a scam. Ta

Wutang_2

sgh1976 wrote: »

Care to share why you think a Government run scheme to help people get on the property ladder is a scam. Ta

Uh oh - the dreaded term (and misconception) "property ladder" is back already!!

vicshippers

Poppy10 - Shared ownership really isn't a scam...it's niave to generalise so broadly. For some people in some circumstances, it is not ideal. For us (a couple with a good income, likelihood that that income will increase over the next 5 years, but no facility to save £40k in 1-3 years) it's ideal. I'll be paying the same into my mortgage as I currently pay in rent - only after 5 years I will have equity.

The price of the apartment we're looking at isn't over-inflated either...

Please explain how this is a scam to someone in my circumstances?!

To call something a 'scam' is to imply that it is set up to defraud/decieve people, while the system may not be perfect for all people, by no means was it set up to get money out of people via deceit.

alexnotts

poppy10 wrote: »

Shared ownership is a scam, though. Avoid.

I dont think you know anything about this scheme do you? Or possibly, even what the word scam means.

Strictly speaking its not ever shared ownership, its an equity loan. The buyer owns 100% of the house buy only pays for 70% of it.

It useful for people who cant raise a deposit (or a large deposit), and it means that they have 5 years in the property market for free!