MSE News: Budget 2013: Help to Buy mortgage scheme to launch

shortchanged_2

The other point is this scheme is only running for 3 years, so what happens after that?
People wanting to buy after the 3 year scheme runs out will be unable to buy?

Audiman7

shortchanged wrote: »

Sorry it's not bringing anything up on my computer apart from a 1 page glossy flow chart type thingy.

Took a screenshot for you.

http://img27.imageshack.us/img27/4569/34112271.jpg

shortchanged_2

Audiman7 wrote: »

Took a screenshot for you.

http://img27.imageshack.us/img27/4569/34112271.jpg

Thanks for clarifying that.

andyscott

To be honest I cant see these schemes making much of a difference. Its not the first time that the Government have spoke about helping first time buyers only for it to completely fail.

I read today that the mortgage gaurantee scheme is only gauranteed 30%. Realisticly people who are struggling to buy their first house may have a deposit but still cant get a big enough mortgage.

The average wage in uk is £26k and if maybe families with young children have 1 parent stay at home then they are only going to qualify for a mortage of 70k if they are lucky.

i think there are also a lot of people who in a position where as they cant buy their first house because of mistakes when they were younger. A lot of younger people get credit cards, store cards etc they fail to keep up to date with payments and it all mounts up. Even though they have changed their ways and are now working hard, no credit cards they still get knocked back for a mortgage even though they could be paying a lot less for a mortgage than they pay for rent.

maybe we need to start solving the crisis in this country by teaching kids about finances in schools instead of forcing them to learn foreign languages that 99% of them will never really use seen as though english is the 2nd most used language in the world.

Wallhart

Is the amount you owe the governement 20% of you mortgage or 20% of your house price.

The latter seems crazy and a massive turn off.

Audiman7

It's 20% of the value of the property.

Seems fair to me, if it goes up you both gain, if it goes down you both lose.

It is, after all, an equity loan.

moriarty888

shortchanged wrote: »

The other point is this scheme is only running for 3 years, so what happens after that?
People wanting to buy after the 3 year scheme runs out will be unable to buy?

I assume that people trying to buy after 3 years will have 20% less money than people using this scheme, so the vendors will have to drop their prices by 20% and then be stuck in negative equity. Unless they can pay off 20% of their mortgage in 3 years...

This is not going to turn out well

shortchanged_2

moriarty888 wrote: »

I assume that people trying to buy after 3 years will have 20% less money than people using this scheme, so the vendors will have to drop their prices by 20% and then be stuck in negative equity. Unless they can pay off 20% of their mortgage in 3 years...

This is not going to turn out well

Or we'll have some other crackpot scheme to prop up the housing market.

feucht44

Can't see many will actually go for this once they look into the details, if the reaction in my office is anything to go by (wild enthusiasm, then doubts, now pretty much outright hostility!).

As mentioned, the Govt will own 20% of your house, and you will have to eventually pay back 20% of the value of your house at repayment time. If you could only find 5% to start with and sell after 5 years say, once you have paid the mortgage lender and the govt back, you are unlikely to have much more than 5% deposit left for your next property. If you do want to repay partially early you need to find half of the 20% at least, and you need to get the house valued so you know what the 20% is worth.

If you don't want to sell and instead see out your mortgage you will have a lovely big lump sum to find in your retirement.

You have to take the view that your circumstances are likely to have changed for the better in 5 years time to give this a spin...

Bark01

If I can afford to go it alone would this scheme still make sense to use? The scenario I’m thinking of is:

I’m a FTB with a 25% deposit
I use 5%of this as a deposit
Use the government 20% scheme to up the deposit to 25%
Stick the 20% of my money that I have not used in a savings/investment scheme for 5 years.
Then when the government wants the 20% back pay it straight off and pocket the 5 years interest from my own investments?