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Homebuy scheme - Not as good as it seems
wagon_2
Posts: 23 Forumite
12.5% of the property price in provided by the Government.
12.5% of the property price is provided as a loan by the mortgage lender and is interest free for 5 years.
So effectively you have an interest free loan of 25% of your property price for 5 years although the government and the mortgage lender still have a 12.5% stake each in the property.
Sounds good hey, if only!!!!!
The problem with it that there is only 3 mortgage lenders that will lend on this type of purchase and the interest rates are a lot higher then on a normal mortgage.
So its nearly as cheap to get a mortgage with 87.5% of the asking price on the open market where you can choose a mortgage which in much more flexible and you are buying a 87.5% stake in the property and not just 75%.
But the catch is you can not just use the governments 12.5% it must be used to conjunction with the 12.5% loan from the mortgage lender.
So the ‘Openbuy’ scheme seems more like a ‘Closedbuy’ scheme !!!
12.5% of the property price is provided as a loan by the mortgage lender and is interest free for 5 years.
So effectively you have an interest free loan of 25% of your property price for 5 years although the government and the mortgage lender still have a 12.5% stake each in the property.
Sounds good hey, if only!!!!!
The problem with it that there is only 3 mortgage lenders that will lend on this type of purchase and the interest rates are a lot higher then on a normal mortgage.
So its nearly as cheap to get a mortgage with 87.5% of the asking price on the open market where you can choose a mortgage which in much more flexible and you are buying a 87.5% stake in the property and not just 75%.
But the catch is you can not just use the governments 12.5% it must be used to conjunction with the 12.5% loan from the mortgage lender.
So the ‘Openbuy’ scheme seems more like a ‘Closedbuy’ scheme !!!
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