Open market equity scheme Scotland query

kay0601

Hi there, I’m hoping someone can help.

We’re looking at using the open market equity scheme to buy our first home. Basically my question is, if the government ends up lending us say 30% of the cost of the house, does that mean our loan to value would be 70% (or less since we’d have a deposit)?

Also, if anyone has any experience is buying through this scheme I’d love to hear and positives and negatives they’ve experienced.

Thank you!

kay0601

Bumping in the hope of receiving a reply or three

Sibz

Do you mean the Help To Buy scheme?
If so; there are a fair few boxes you need to be able to check to be eligible for it.

It depends on Property value (think it also need to be a new build up to £200k), household income (you shouldn't be able to afford the whole thing yourself), the income would further affect how much they would be willing to contribute (max 15% of the property value - so if 200k a max of 30k - but if your income allowed you affordability of over 170k you'd only be able to apply for the difference).

Downsides can be that you can only pay it back in amounts no less than 5% each time - each time you pay back to it you have costs involved. It can complicate selling the property if you still have the shared equity - I think you'd also have to apply for their permission to sell if you haven't previously cleared it.
In Scotland the amount is interest free and there seems to be no time limit for paying it back - if you die it would come from your estate I think.

There are pros and cons obviously - oh, and the amount you pay back is worked out by percentage of property value. You'd get a certain percentage of house value at buying, any time you pay back you'd pay back whatever percentage of the property value at that time (whether higher or lower).

I'd really recommend sourcing a reputable FA who should be able to give you the details as they'd affect you specifically.

Pixie5740

No the OP does not mean the HTB Equity Loan scheme which is only available in England. The OP is in Scotland and is referring to the Open Market Shared Equity Scheme which, as the name suggests, is for purchasing homes available on the open market.

https://www.mygov.scot/open-market-shared-equity-scheme/

In answer to the OP's question is yes, if the Scottish government have 30% of the equity in your home then your LTV would 70%.

Sibz

Pixie5740 wrote: »

No the OP does not mean the HTB Equity Loan scheme which is only available in England. The OP is in Scotland and is referring to the Open Market Shared Equity Scheme which, as the name suggests, is for purchasing homes available on the open market.

https://www.mygov.scot/open-market-shared-equity-scheme/

In answer to the OP's question is yes, if the Scottish government have 30% of the equity in your home then your LTV would 70%.

Hi Pixie. Up here (in Scotland) we do have Help to Buy (https://www.mygov.scot/help-to-buy/) - it is called this on the government site for it and on all the paperwork I went through with my FA not very long ago. So Help to Buy isn't an England-only thing - some aspects of it are certainly quite different - that is all.

The OMSE scheme is clearly something different. I haven't come across that one myself.