Ztan's Shared Equity Story- MFW from the word GO

ztan

Well not much progress so far...
We've finally been allowed inside the house, on our own though! We took in some chalk and a tape measure and went around drawing on the floor, checking if our furniture will fit etc. :rotfl:

We're looking good to move by the middle of next month, but still no date for definite.

Our landlord has agreed to let us pay our rent week by week until we leave, to save every penny for that first month's mortgage payment.

I'm dreading it... what are other people's experiences of their first payment? According to the mortgage info, our first month's payment will be £840 to cover some additional fees which have to be paid to the lender. (It's some new fangled fee which covers exit fees etc)

Obviously, we then have fees to pay to the builder, the insurance, and everything else.

This first month is going to HURT!

Wickedkitten

Overpay on the mortgage by up to £6,000 a year, each year for the first 5 years. (Chucking the amount in an ISA and then moving to mortgage)
This means the mortgage would be approx £72,000 by year 6, and then remortgage for the additional 20%. (I.E keep the LTV as low as possible)

Right now as far as your portion goes, you have a 93% LTV, and I'm assuming that they made you maximise the amount that you are taking out if it is a mirror of the Homebuy Direct Scheme. Do you have to pay any service charges on top of your mortgage at all? Is your mortgage on a tracker or is it fixed, and if it is fixed then how much will it go up by after the fixed rate period finishes?

We have 10 years to pay back their share. The first 5 years are interest free, and the interest is then 1% plus the increase in the RPI from the previous year. (So not too much) This is paid as a monthly payment to the developer until they receive their 20%.

After the 5 years do you have to have it valued so you are paying it back at the current valued price, or do you still go by the original 30k?

SmlSave

How nice of your landlord to let you pay week by week

I'm dreading it... what are other people's experiences of their first payment?

My first payment was a month and a half's all together as we completed half way through the month. They just added the half month to the next full months payment so I'd advise you to be aware - just in case. As we'd been pre-warned we had two months mortgage in savings

ztan

Wickedkitten wrote: »

Right now as far as your portion goes, you have a 93% LTV, and I'm assuming that they made you maximise the amount that you are taking out if it is a mirror of the Homebuy Direct Scheme. Do you have to pay any service charges on top of your mortgage at all? Is your mortgage on a tracker or is it fixed, and if it is fixed then how much will it go up by after the fixed rate period finishes?

Wicked kitten, right now our LTV is 95%. They haven't made us maximise anything, I mean our mortgage is for £112,500 which is hardly breaking the bank, or our backs.
No service charges, no nothing. The house is 100% ours, so if something goes wrong, we fix it. Total responsibilty!
Mortgage is fixed for 2 years at 4.89% then moves to their SVR which is currently 3.5%- we will be attempting to get another fix as soon as possible though. I need to know how much we're paying each month.



After the 5 years do you have to have it valued so you are paying it back at the current valued price, or do you still go by the original 30k?[/QUOTE]

Each time we want to "pay off a chunk" or if we want to remortgage for their full portion, we get the house valued at that point, and we have to pay them 20% (or a percentage chunk) of that amount, whether its less or more than the original £30k.

The valuation cannot count any improvements made by us, so that they are entirely for our benefit- the developer does not beenfit from our hard work.

If that makes sense!



SmlSave, we're trying to pack away as much extra now to cover all the unexpected costs on top of the massive mortgage payment- i.e connecting to BT etc! It's hard to plan though, always going to forget something!

ztan

I have just taken drastic measures to ensure I am not dwindling away any of my income (and ditto for my partner)

I have made, and I do mean handmade a "financial diary"

Each day is an A4 page with the following:
Anticipated spend: £...
Actual spend: £...

Account balances- list of all

and a sellotapted envelope to hold any receipts for each day.

I figured that based on my lovely excel spreadsheet, there is aproximately £200 a month which seems to "vanish" and is never seen again.

This way I can see our spending habits, encourage awareness between my partner and I and we can finally tuck away all that extra money for rainy days and broken boilers... or even holidays if we're lucky! :T

I will anticipate our spend each day- which in theory should be minimal if not £0.. and then see where we're going wrong.

Oh, and I'm a little bored at work so thought sellotaping "borrowed" envelopes to a pad I "borrowed" would preoccupy me... :rotfl:

SmlSave

Oh, and I'm a little bored at work so thought sellotaping "borrowed" envelopes to a pad I "borrowed" would preoccupy me... :rotfl:

Has it worked? I'm so glad my work don't stop me from reading MSE!

ztan

SmlSave wrote: »

I'm so glad my work don't stop me from reading MSE!

Ditto Sml

I have finished sticking it all together this afternoon, so I should start seeing benefits in a few weeks. I'm going to continue our normal habits for another week, and then start making adjustments...

Baby_steps_2

Just wanted to say, my self and my partner did exactly the same thing and I really do think the scheme works for first time buyers. I know some people say that they inflate the house price for these scheme but as a stepping stone it gives you an amazing opportunity.

Don't get me wrong it has all got a bit complicated for me, for a start we did it 2 years ago so at the peak of the market (great timing I know!!). This does mean we are currently in negative equity (though not for mortgage purposes which really helps), and also mean our developer takes a percentage of this so they are down about £3,5K and us £7K. Though the good news as someone said the mortgage company has first claim on the house and though we started with a 25% deposit we now have a 20%ish for mortgage purposes so are still able to remortgage should we choose to. We are currently staying on the SVR and making the most of the lower rates.

Ok, so the negative equity is a bit of a pain, but we have an amazing 3 bed town house in a nice area and no need to move anytime soon (our other option was to buy a 2 bed flat, and boy am I glad we didn't do that, as would never get the loss back before we need somewhere bigger). This means we can wait and see what happens to house prices and reduce the mortgage before looking to sell/ buy the other 25% at some point in the future.

(additional complication that me and OH have now split - but thats a whole other story and not relevant here:eek:)

This idea doesn't work for everyone but I still believe it was the best decision for me, so go you and well done for getting on the property ladder.

Good luck with your journey and I’m sure you will get a lot of support here as I have.

ztan

Thanks for your words of support baby steps! Sorry to hear about the relationship breakdown mind...

I am a meticulous person, with a very obsessive mind, so I have literally thought through every single possibilty and situation, good and bad to see if this was a good idea. I know there are pitfalls, like the dreaded negative equity but hey... why worry I say?!

We're lucky because our house is a good long term option for us, in terms of having kids etc, so we don't need to panic about moving. We're also living in the commuter belt for our area, with plenty of access to work... again evidence of my meticulous planning!

I just want the keys now!!!!!! :j

Baby_steps_2

well hopefully not to long to wait:j:j

All decisions in life involve some element of risk but as long as you have considered all possibilities to make informed decisions then you sometimes have to take a risk!!!

Negative equity is a pain but as with you we planned on staying so was never to much of a consideration as I really believe property is a good long term investment. We were never looking to make a massive capital gain (a new build house so that was never a plan!!) we only wanted to get some equity to one day own a property.

Good luck with it all and hope you get in soon.