The Changing Face of Home Buy Direct

sgh1976

This may please those that hate the scheme.

Launched as a way to get FTB on the "ladder" by offering a 30% deposit loan. Therefore helping those that could afford the mortgage repayments but not raise sufficient amounts to cover the deposit banks would want in the current climate.

Halifax and RBS led the way on this scheme ( I believe Nationwide are part of it but get very little due to wanting a 5% cash deposit from the buyer).

As of this week the Halifax have now changed their policy to wanting a 5% cash deposit on top of the 30% from HBD.

RBS will remain the only bank willing to do the 70% mortgage but have removed all their competitive rates from this market and created higher rates for this scheme.

Top this off with the return of the stamp duty threshold (125k) from Jan 1st 2010 (when a high % of HBD purchases will be completed due to sites still constructing) It seems the good deal is no longer a good deal.

So just a warning to those who are entering the HBD scheme at this point. You are going to get a terrible deal compared to the folk who got on from April - September.

iscrimger

I'm using a similar scheme in Scotland. Got a bunch of quotes based on not being able to provide a deposit and now I am left a bit high and dry.

The scheme used the highest of my quotes, from Halifax which I now cannot turn to as they need the 5% deposit. I'm going to goto a broker and see what they can find - but it has seriously put a spanner in the works. There are apparently some lenders still prepared to offer a mortgage with no deposit for the Scottish Scheme. (One of them is Llyods TSB!!)

I do agree though. Anyone entering these schemes is going to get a slightly ruff deal!

poppy10_2

Told you it was a scam

Muhasib

Be aware also that the Housing Association that is your local agent for the scheme may also take its time just to go through your application. For instance you are required to provide 6 months of bank statements (as well as many other documents) and it appears that they may even come back to ask about payees on cheques you wrote at up to 6 months before you applied for the scheme.

I guess anyone applying after the end of September should not expect to exchange before the end of the Stamp Duty concession at <£175k. It doesn't seem joined up to take Stamp Duty initially and then to support over the next 5 years with an equity loan if you deem that the aim is to assist FTB's who qualify. It just seems to recycle the same money for the 1st few months.

Didn't take long for Poppy10 to appear!

sgh1976

poppy10 wrote: »

Told you it was a scam

:rotfl::T


My own worry is that my house is currently, well its just a patch of dirt at the moment and the mortgage offer from Halifax expires on the 31/01/10. I am waiting to hear if the house isn't built and I am in by that date whether I will have to pay the 5%.

Auzelia

well Im glad I got in before the change(s) happen

brit1234

Good that its going, govornment funding is drying up for it.

It dangerously trapping a huge amount of first time buyers into negative as the crash resumes.

What is needed is lower house prices and not schemes raping first time buyers fiances for the rest of their lives.

Auzelia

brit1234 wrote: »

Good that its going, govornment funding is drying up for it.

It dangerously trapping a huge amount of first time buyers into negative
as the crash resumes.

How would the first time buyer be in negative equity. e.g property purchase price £64000, mortgage £45000 and scheme contribution £19000 approx LTV of 70%, so already a good ratio "if" the crash resumes.

What is needed is lower house prices and not schemes raping first time buyers fiances for the rest of their lives.

Of course lower house prices would be better but its not really going to happen and as for raping the FTB finances for the rest of their lifes. Using my knowledge of the LIFT scheme I really cant see that as you dont actually pay anything back until you sell your property and even then its %age based so if the value has fallen or risen they will only get the same %age that they payed back. So realistcally you are not any worse of

But then it seems that your knowledge of the Housing market and ALL the equity schemes available is so much better than mine :rolleyes:

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:rotfl::rotfl::rotfl: god damn system :rotfl::rotfl::rotfl:

Muhasib

brit1234 wrote: »

Good that its going, govornment funding is drying up for it.

It dangerously trapping a huge amount of first time buyers into negative as the crash resumes.

What is needed is lower house prices and not schemes raping first time buyers fiances for the rest of their lives.

Brit1234 - Do you know the terms of the Homebuy Direct Scheme with regards to selling at less than the original cost?

If you do then you will realise that Negative Equity would not be the concern of the householder unless the value falls by more than the equity contribution by the Homebuy Agent and Housebuilder.

why are talking about 'raping fiances' anyway? - this is a mortgage forum

iscrimger

poppy10 wrote: »

Told you it was a scam

Yes you did but you clearly failed to listen to what's been said about LIFT. Even if my home value fell over time I would only have to return my % back to the Scottish Government. Based on what most people will be experiencing using the scheme it is very unlikely house prices will fall such that they will end up in negative equity.

For example if I buy a home for £120k now, and my share is £81k it is VERY unlikely that in 2 years time my home will be valued at less than 81k! That would be a drop in value of over 30%.... the country would be in some fairly dire straights.

I don't feel the scheme will 'rape' my finances either. Right now I pay £700 in rent and £250 in council tax every month. My finances are currently being 'raped'. Using this scheme it looks like my mortgage payments will be between 380-450. A minimum saving of around £200 after the factors charge is taken into account.