Help to buy... good idea for FTB or a massive con?

ging84

Sorry i did not realised the gov website now lists shared ownership under the title of help to buy and thought you were just completely missing the point of the actual help to buy schemes and being lead to believe it's a form of shared ownership / affordable housing like some people try and make out.

the equity loan is available to people with large deposits if they would not qualify for a large enough mortgage for the house they are trying to buy on their own

so you have an 80k deposit, the bank will lend you up to 80k then you could use the equity loan to borrow another 40k, if the bank were prepared to lend you 120k though you would not qualify as you could buy it without the scheme

marking_bad

Is it possible to have a private shared ownership, I see a few on rightmove and wonder if they are housing association.

kingstreet

The other shareholder is always a Housing Association. The ones you see on Rightmove are "resales" where the current part-owner is selling their share.

The property remains leasehold and the vetting is the same. You still have to have a need for affordable housing.

Housing Associations do also have newbuild SO property, as well.

In general, the HCA HomeBuy Agents are now calling themselves "Help To Buy Agents" and the three Help To Buy Schemes are;-

HTB - Equity Loan (20% loan to increase deposit on newbuild)

HTB - Mortgage Guarantee (95% scheme)

HTB - Shared Ownership (HA part-owns property, rent usually paid).

HTB - MG is not run by the HCA Help To Buy Agents. It's dealt with directly by the lender and the borrower, with the lender making returns to the Treasury via UKAR, the body which is running down NRAM, Mortgage Express etc on behalf of the taxpayer.

marking_bad

I'm still a little confused as to how you go about paying back the 20% equity loan.

kingstreet

marking_bad wrote: »

I'm still a little confused as to how you go about paying back the 20% equity loan.

There is no 20% equity loan on shared ownership.

If you buy a newbuild on HTB - Equity Loan, you repay 20% of the value of the property at the time;-

on sale of property
at end of mortgage term
voluntarily at any point, subject to repaying half or all the loan.

If the loan continues, you begin to pay the fee on it from the beginning of year six and it's 1.75% of the loan amount year. The fee increases annually.

The guide is here;-

http://www.homesandcommunities.co.uk/sites/default/files/our-work/help_to_buy_buyers_guide_sept_2013.pdf