First time buyer scheme.....confused

ste_w

Hey, sorry if you have had this question asked in the past.

Im looking at buying a new home through the first buy scheme. Its a 20% joint equity loan over 25 years (interest free for the first 5 years), from the Government and building company (Gleeson homes).

From what I gather the interest on this loan is:

Year 6 is 1.75%
Years 7-25 is RPI + 1%

(although not 100% sure).


The problem is i've seen too many mixed reviews about this scheme, what are your thoughts?

Thanks

Ste

steve1980

Why don't you ask Gleesons to go through it with you?

betmunch

Without having the scheme T&C's in front of me its impossible to say, but there used to be a good scheme which the loan payments went up by RPI+1% each year. I suspect this is how Gleesons opperate

ste_w

Thanks for the replies. Yeah I've asked Gleesons but the sales person doesn't seem to know what they are on about - not feeling very confident in them now. I've been to an independant financial advisor today and they have cleared some things up.

They say yes its a good way to get on the property ladder but try to pay as much of the equity off before the 5 year interest free ends.

Here some details:

On the paperwork it says "Interest is payable at 1.75% on the 20% equity loan after 5 years. In each year thereafter, the interest is influenced by the retail price index plus 1%."

Now I'm in two minds but leaning towards going for a smaller valued house with standard mortage (90%) now.

Anyone had any experiences with this scheme? or this company?

WOW house buying is sooo stressful!

Thanks for your help

Ste