Barratts Head Start Scheme - Advice please

Chz_uk

Hi, I'm looking for some advice on a plan I have to get out of the Barratts Head Start scheme please - any comments would be gratefully received.

I bought a Barratt home in 2009 with their Head Start scheme where they had a 15% equity in the property. The sale price was £116,995, Barratts stake was £17,549.25, my deposit was £5849.75 (5%). Barratts subsequently sold the second charge and it now resides with a company called Rose Shared Equity.

My property is now worth less than the purchase price, I recently had it valued at £90 - £95k and one of the same type sold on the street last week for £92,500. I have had a repayment mortgage from the start and have about £86k remaining on it.

I need to repay the 15% by 2019 or if I sell earlier it will be 15% of the current value. I plan to move during the next year and possibly sell the property. I took Voluntary redundancy last year so had a pay-out, £20k of which was going to be used for a new deposit on my next house.

Anyway, thats the background. I was considering whether it would be better to try to get the second charge removed early using my new deposit money? As the property is now worth about £95k max then 15% is £14,250. If I can negotiate with Rose Shared Equity to say £10k to remove the charge would that be worthwhile looking at my figures? I'd be spending £10k of my saved money but I wouldnt have to pay 15% of the value to Rose when I sell the property next year. Say I then sell it for £95k, after I've paid the mortgage I'll get £10k back (obviously minus all the fees).

Does this approach make the most financial sense? Would it be recommended to get rid of the second charge before selling or getting to the 2019 payment date?

Also, there must be some forum members that have had Barratts Head Start or the similar Dream Start Schemes who will have gone passed their repayment dates by now - does anyone have any experience of that which they could share?

Thanks for all your help in advance.

chanz4

I can see them laughing, they are not going to take less that the already lower than expected equity

Chz_uk

Years ago they offered settlement at £12.5k but I wasn't in a position to pay at that time.

Thrugelmir

Might as well ask. Then you can consider the options better.

Paying down the mortgage would likewise save you interest.

Chz_uk

Thanks for the replies so far.

I'm basically trying to find out if it's better to buy out the second charge, pay off say £10k of mortgage or do nothing?

LMJ10

Hi there have you had much luck with Rose equity!?
I'm in a similar situatiin where come 2019 will have to pay back 15 % we are trying to save as much as we can to make them an offer, unfortunately we have experienced financial problems and I do remember in my contract it saying that the loan could be extended for another 5 years - that was when Barrett's/David Wilson owned the loan tho, but I can't remember Rose equity ever stating my T&C's changed changed!!