First time Buyers, Shared Equity Help

badmoon

wymondham wrote: »

I'm not talking specifically .... these schemes were introduced to enable the large housebuilders to shift their houses. Had nature taken it's course and the prices reduced naturally then these schemes would not be needed..

Make no mistake there will be a price further down the line to pay for entering into these schemes - you don't get a free ride. What does the small print say about who owns what and what happens in the various circumstances such as if the house is valued at much more, or much less than now when you come to sell?

Perhaps there will, perhaps they won't. The house i'm buying is in a regeneration area, the price I'm buying at is realistic and I have researched local house prices. I think I'm getting a great house (hopefully as don't want to jinx Friday) for a very reasonable price.

I'm not a fortune teller, and I don't think any of us are, but I feel happy so far. Time will tell of course.

The house is 100% mine with the charges as explained to the OP above. If the house is valued at more or less, I pay a larger or smaller amount back depending on the situation at that time.

scobie140

DVardysShadow wrote: »

Do look at what happens if you need to sell the property - whether there are any restrictions on who you sell to or whether anyone has to approve them.

And consider this. If you need to sell, you may need to redeem the shared equity or ownership. If it would be a problem for you to buy 100%, you will almost certainly have problems finding a buyer who can afford to buy the property.

And finally, understand what negative equity is and how you get into it. Really understand it, so you could explain it so a lamppost would understand. Do this before you go further.

I have no doubt that we can afford to buy the % of equity from the company before the ten years as my new contract is very good and after about a year i will be due a raise and if i continue to perform and develop I could achieve an other increase in salary. Is negative equity when the value of the property drops below what you have it mortgaged for? which would meanif you were to sell selling it for a loss?

badmoon

brit1234 wrote: »

Buying Shared equity schemes at the moment is high risk as prices continue to fall.

If not built yet it is even bigger risk especially if you agree to buy in contract. This is because your mortgage offer may be out of date and you can not get one at the price you are contracted too. This has been very common in last year. The other problem is if the valuation when completed is far below the sale price you have agreed, you may not be able to get a mortgae and get sued by builder.

If you do buy in this horrible scheme get one which is built.

Personally I would save a bigger deposit and enjoy the price falls for at least 6 months.

Another typically positive post. I'm sorry to be so blunt but how can you call something horrible when you don't appear to know the difference between shared ownership and shared equity? In addition, i've already explained to the OP above what can be done regarding mortgage offers and they're not all time limited to 6 months or less.

badmoon

scobie140 wrote: »

From my understanding of what we were told is that if within the ten years we pay back the equity then it will be at the price of when the house was purchased but should we sell then the company get that % of the sale value or should we want to buyback after 10 years then the house must be re evaluated and you would have to pay back the % of the new evaluation, this won't be a problem for us as we will be paying back the equity within the ten years. Ok so from what you's are saying that we should make sure that if we go ahead with this then we should make sure that the mortgage has a long as possible stop date beyond the planned completion date? if we put the deposit down would we need to apply for the mortgage straight away?
The company is only doing shared equity on a few of the properties on this plot, There is only two houses half built on the plot so far and the rest are in the very early stages/not even started yet, this was the appeal for us as we could get one reserved and still have plenty of time to save up as much as possible to get all new furniture and the deposit etc whilst they were being built. as for the value of the property falling thats not really an issue for us as we don't plan on moving hence why were looking into moving into a 3bed when we don't have kids yet but plan on them in the future. In an ideal world we would be well of off or have well of parents who could help us with a deposit for a proper mortgage but were not that lucky so have to make the best of what we do have.
Badmoom it would be nice if you could give me a update of how you got on with all the final part of the deal, any hiccups or issues which i may have to look out for etc, once you are settled in and have time as i know how hectic moving can be.

That's exactly my understanding too.

And absolutely re mortgage offer, it was all done for me though in terms of having a long expiry date on the offer. I think the developers said initially a completion date for April, a few months were added on as delays can be experienced and as I said before as long as you make sure the long stop date is put in there, it provides you some protection.

You need to apply for the mortgage straightaway but won't have to pay the deposit until shortly before completion (that was the case for me anyway).

And I will do. I'm feeling quite anxious but am told this is normal. Won't have much internet access so it may be a week or two but will do as soon as I can.

Good luck.

scobie140

badmoon wrote: »

That's exactly my understanding too.

And absolutely re mortgage offer, it was all done for me though in terms of having a long expiry date on the offer. I think the developers said initially a completion date for April, a few months were added on as delays can be experienced and as I said before as long as you make sure the long stop date is put in there, it provides you some protection.

You need to apply for the mortgage straightaway but won't have to pay the deposit until shortly before completion (that was the case for me anyway).

And I will do. I'm feeling quite anxious but am told this is normal. Won't have much internet access so it may be a week or two but will do as soon as I can.

Good luck.

Thanks, Good luck with the move hope it all goes smoothly for you

wymondham

scobie140 wrote: »

I have no doubt that we can afford to buy the % of equity from the company before the ten years as my new contract is very good and after about a year i will be due a raise and if i continue to perform and develop I could achieve an other increase in salary. Is negative equity when the value of the property drops below what you have it mortgaged for? which would meanif you were to sell selling it for a loss?

Sorry to sound harsh, but if you don't know what negative equity is then you should not be buying a house - any house :eek:

brit1234

badmoon wrote: »

Another typically positive post. I'm sorry to be so blunt but how can you call something horrible when you don't appear to know the difference between shared ownership and shared equity? In addition, i've already explained to the OP above what can be done regarding mortgage offers and they're not all time limited to 6 months or less.

I think you have miss read my post, it is aimed at shared equity and not shared ownership. There is no reference at all to shared ownership at all.

I am simply explaining the dangers of buying off plan or yet to be completed properties with the aim to protect the original poster.

Remember prices are falling and if you lock into a property not built yet the survey price is highly likely to be far less than you are contracted too.

Surveys often down-valued asking prices especially on new builds and that was in the last twelve months when we had price rises. Now they are falling surveys are likely to have a even lower value. This can affect the ability to complete a mortgage and can result in developer litigation against the buyer.

This web site is called Money Saving Expert after all.

scobie140

wymondham wrote: »

Sorry to sound harsh, but if you don't know what negative equity is then you should not be buying a house - any house :eek:

Got to learn somehow, hence why i registred here to get people with experiance advice. No one in my family has been in the financial position to buy a house so i have not had the experiance of even witnessing the procedures to have any slight backround knowledge. I'm a quick learner and since you know about it could you please explain the basics to me so i can get a proper understanding for the foundations of it then i'll work on understanding the more complicated parts of the topic

neverdespairgirl

badmoon wrote: »

Perhaps there will, perhaps they won't. The house i'm buying is in a regeneration area,

Call me a cynic, but "regeneration area" sounds like "!!!!!! hole" to me.

Running_Horse

It's like the credit crunch never happened. It will be 125% mortgages next.