Mortgage - Lift Scheme

jeleigh

Hi,
Just received a passport form for the Lift scheme! :j

Has anyone else purchased a house through the lift scheme recently? Looking for support from someone that is in (or has been in) a similar situation!

I am feeling a bit nervous about all of this mortgage stuff :eek: but also excited!

Thanks

motherbored21

Excuse ignorance, but what is the Lift scheme? Is it like HTB?

Building_Surveyor

Never heard of it, are you in Scotland by any chance?

polarization

http://www.scotland.gov.uk/Topics/Built-Environment/Housing/BuyingSelling/lift

mardiemare2008

I do not have any experience with LIFT, but I too would be interested to hear of other's experiences. Especially the 'Open Market Shared Equity scheme'.

jeleigh

Thanks everyone. Yes, Lift is exactly as the link pasted above states, it is similar to Help to Buy scheme and yes I am in Scotland. I have just been approved for the open market lift scheme, mardiemare if you would like to ask me anything about Lift, I would be more than willing to help if I can!?

Thanks

mardiemare2008

Thanks Jeleigh -

i will be a sole applicant on a mortgage - just looking for a small 2bed flat/house for just me around the Falkirk area. Budget can afford approx mortgage of 50k.

Do you get approved for the LIFT scheme before approaching a lender for an DIP?
I have heard there are a number of conditions. i.e the number of bedrooms and only certain property types etc.

This is the bit I don't quite get

You will need to show that you cannot buy a house suitable for your needs without help from the Open Market Shared Equity Scheme.

mardiemare2008

Just found this that helps explain things to me lol.

Example

An example of how the Open Market Shared Equity Scheme works:

Mandy currently rents a home from a local housing association and she earns £18,000 a year.

She has £8,000 saved towards the cost of buying a property. She may keep £5,000 and must contribute 90 per cent of the £3,000 balance. Therefore she would be expected to make a deposit contribution of at least £2,700.

After being accepted onto the Open Market Shared Equity Scheme, she identifies a two bedroom property which has been valued at £79,500. This is within the maximum price of £80,000* that can be paid for a two bedroom property in Falkirk. The maximum mortgage that Mandy can secure is £54,000. This sum, together with her savings of £2,700, means that Mandy can contribute £56,700 towards the purchase of the property.

The Scottish Government is able to fund the balance of the purchase price of £22,800.

After the property has been bought, Mandy has a 71.32 per cent equity stake in it. The Scottish Government holds the remaining equity stake of 28.68 per cent.

* Based on threshold prices as at December 2010.

So if I can obtain a mortgage for £50k and I have £12k in savings it means I would put £7k of my savings towards a deposit and keep 5K for legal costs. This means I would have £57k to go towards a property up to the value of £80k. (£80K is the max price for a property with 2 bedrooms and one living room). So if the property was £80K then the government would put in £23k?

Dunno what that is in percentages though.

jeleigh

I will tell you what I have done so far when applying for Lift so that you can get a better understanding, I was like you when starting out, I had no idea what to do! My partner and I (plus our two children) are hoping to buy our first home through the scheme.

I phoned Lift for an application and two weeks later it arrived in the post.

We went to an Independent Mortgage adviser with the application who completed the form for us, it wasn't hard to complete as the mortgage adviser told us what to bring along and he did most of the work really! This was free of charge as was all the advice and information he gave us. He obtained a decision in principal for us from a mortgage lender to send with the application. I think that you have to have the DIP to send with the form.

We received a passport letter stating out contribution and maximum apt size.

As for the size of house that you can buy, you are entitled to one above your needs, so for us being a family of four we can have a maximum apartment size of 5 but there is a ceiling price for how much we can spend, this amount varies in each area. You would most likely be entitled to a 3 apartment.

You are expected to contribute the maximum mortgage that you can afford, which will be between 60-90%.

Hope this helps and I am pretty sure that this is all accurate info!

jeleigh

Sorry, I was in the middle of replying then saw that you had posted!

Yes, that's correct, so my maths is not super Lol but I think that you would then have 72% share of the property, although you will own it 100%, the government will have a share in that. And you can gradually buy the share back if your circumstances change and your income goes up. It like a loan over 19years and if you sell the property, the government take their stake back.

mardiemare2008

Thanks a lot for clarifying things for me.

I think this is definitely the way forward for me - as there are properties out there for 50-60K, but they're either in really rough areas or need A LOT of Renovation (which I wouldn't be able to afford.

Taking my budget up to £80k would really open my options up