Selling a FTBI home...

sturgeon

I own a home under the FTBI (First Time Buyers Initiative). Clearly I pay back the % I don't own when I want to sell it. Some other similar schemes seem to make you sell the % of your home (i.e. if I bought for £150k and own 50%) it would go on the market for £75k to buy 50%.

As far as all documentation tells me, it just says you pay back the unowned % when it is sold, so this seems to me that I can market it normally at full price, just I will have to pay back the unowned % when I receive funds. Can anybody on this scheme verify how a FTBI property is sold?

I understand other schemes may not drop their prices and be over valued etc, however this sale was treated like any other home in the development and was valued accordingly and the price dropped to meet the banks valuation. It turns out that out of 25 or so 1 bed flats, mine was the 2nd cheapest and only about 5 were allocated to the FTBI scheme.

myredhotcar

The scheme will not allow you to market the property below the current market price. If you do wish to do this you will require an independant valuation of the property and then submit this to them and ask permission.

If your property is in negative equity things change a little. You will need to get an independant valuation as before and ask permission to market the property. However if the value is less than the intial property price the scheme will work as below.

1 - The value of the sale will go toward covering your motgage amount
2 - Any money left over will be used to cover the FTBI amount
3 - Any remaining debt will be written off by the FTBI

In essenece as long as you have enough funds to cover your mortgage and the scheme agree to the value - you can write off the FTBI loan.

Let me know if this makes sense. I'm currently having a nightmare with selling my property!

mattytwig

Very interesting. Here is my situation >

I have a £62,500 mortgage, which is 50% share with the FTBI scheme on a £125,000 property.

Does this mean if the property is sold for £100,000, then my mortgage would be paid off, with £37,500 going towards the government scheme? I was under the impression that this negative equity would be halved in my case, 50/50, relative to the percentage of the initial purchase?

Matt

Heguzuk

What if I want to part exchange my house for a bigger one, can I use the benefit of ftbi still, or will I have to repay and get a new mortgage?

kingstreet

Have a read of this;-

http://www.brent.gov.uk/affhousing.nsf/Files/LBBA-5/$FILE/FTBI Buyers Guide.pdf

basically, this is a shared equity proposition. With such a scheme, the mortgage and secured loan are paid off from the sale proceeds when the property is sold.

You therefore start off with a clean slate when you buy again, with any profit you made on this sale being available as your deposit for the next purchase.

Heguzuk

Just what I'm looking for, D'u know of any builder doing it?

kingstreet

Heguzuk wrote: »

Just what I'm looking for, D'u know of any builder doing it?

I produced that to give details of the scheme you were coming out of, so you'd know what needed to be repaid.

Homebuy is the current Shared Equity offering by most builders. You need to look at the kind of requirements they have to see if you qualify;-

http://www.orbithomebuyagents.co.uk/main.cfm?type=OPTIONS