First Time Buyer looking for advice

bexy87x

My partner and I have our eye on a new build house. The builders are running a shared equity scheme for first time buyers where you only pay a 5% deposit, take out a 75% mortgage and pay the final 20% after 10 years. I have a few questions before we approach banks about a mortgage if anyone can help?

1) My mum has offered to give us the deposit. I've been told that it might be advisable to get a document signed saying it's a gift or it may make getting a mortgage difficult, is this the case?

2) I am doing long term temporary work. We have worked out that even if I was to be out of work my partner could afford the mortgage payments and everything else if neccessary. Am I right in thinking that my work only being temporary would have a large impact on us being able to get a mortgage?

3)Are these shared equity schemes a good idea, or is worthwhile hanging on for aslong as possible to get as big a deposit as possible?

Thanks for your help in advance

scotty_lawrie

I can answer the first question for u. I just applied for a mortgage, and the banks dont mind who the deposit comes from as long as you arent taking a loan or more credit to get it . As long as you have the deposit in place by exchange of contracts/day u get the keys date its all fine

kaych

my partner and i have also applied for a mortgage with his parents providing us with most of the deposit (we have about 10% ourselves and his parents provided a further 20%, so that we can get a good rate on mortgage). we told them about the deposit provided by his parents, the bank said it's fine as long as they do not an interest in the property?

i think you will get a lot of responses on this forum where a lot of them will be against schemes like these.

we have actually been approved for the HomeBuy Direct scheme too and thought it was quite a good idea. but then the agent dealing within our area wasn't very helpful at all. so we dropped the idea and asked for my partner's parents for help instead.

bexy87x

Am I right in thinking the HomeBuy Direct scheme is funded by the government? I don't know if it makes a difference but this one is just done by Taylor Wimpey themselves

kaych

yeah Homebuy Direct is 15% funded by the govt and 15% by the developer.
so i guess it's different if it is solely provided by the developer. but i think the idea is pretty much the same. though for homebuy, you have to start paying interest on that 30% portion after 5 years.
in my view, we thought it was a good idea as the scheme could get us on the property ladder quicker, instead of renting for another 5 years to save for the deposit. whereas the 5 year 'rent' could contribute to our mortgage.
just make sure that you don't pay the price that they advertise on new build. there is always room for negotiation.

DG84

Hey guys, my husband and I exchanged contracts on a large 2 bed house 2 months ago. Completion is due in September. We have been very fortunate with the whole process. The mortgage app ran smoothly and we are being given our 5% as a gift from parents and a letter to prove these funds would be available was sufficient for Catalyst housing. The homebuy direct path was the right one for us and had we not opted for this, we would have to save for another 2 years to afford a home on the open market. Its a 75% mortgage and 25% govt loan interest free for 5 years. It will be our first home and it is large enough to stay in for 5-6 yrs. Any questions feel free to ask