barratt dream start - new build

special_k83

samgoss wrote: »

Hi, can anyone confirm categorically whether the 25% you pay back is 25% of the original price or 25% of the house price when you pay back the second charge loan? I'm pretty sure it's 25% of the house-price at the time of repayment - but is this still true if prices go down? So long as the house price is fairly valued on completion (unlikely), that would have to be a good deal - the builder covers you for 25% of the reduction in prices, effectively?

It is 25% of the value at the time of repayment. They take the average of two valuations, one valuer you have chosen and one they have chosen.

You can also choose to repay smaller percentages at different times within the 10 years but then you may then have to pay the valuation fees each time.

gechman

Hi there - first time here so be gentle!

Does anyone know if the 25% 'deposit' provided by Barratt is seen by most mortgage providers as a deposit?

When I called the mortgage advisors suggested by Barratt they suggested that only Halifax would even begin to look at such a scheme?

Your help is very much appreciated!

Idiophreak

gechman wrote: »

Hi there - first time here so be gentle!

Does anyone know if the 25% 'deposit' provided by Barratt is seen by most mortgage providers as a deposit?

When I called the mortgage advisors suggested by Barratt they suggested that only Halifax would even begin to look at such a scheme?

Your help is very much appreciated!

Typically it's Halifax or Nationwide that are interested in these schemes. On the systems mortgage advisors use, there's a little "shared equity" box they tick and these are the two that come up most. They do, however, treat it as a "true deposit", so you get a pretty decent rate in the end.

gechman

Thanks for the speedy reply!

I ask as i was turned down by Halifax as i have made too many late payments on my credit card so they see me as a bad risk but i have also recently been accepted by HSBC so i wondered if they would be interested in this kind of offer

Idiophreak

RobertoMoir wrote: »

Well yes, but as a practical matter how else other than re-mortgaging would you suggest that the majority of the people are going to repay that massive loan when it comes due?

I know this is an old thread, but I'm really struggling to get my head around people's attitude toward these schemes.

You say "I'm thinking about shared equity", the first thing they bark is "run away!". Then, when pressed, they say "Just save a deposit instead..."

So, it's entirely reasonable to expect someone to save a deposit for a house, but unreasonable to expect them to save to repay the loan, in this case?

Given that, in many areas, rent on a given property is higher than the mortgage repayment on the same place, it seems saving to repay an interest free loan of the same amount (in fact, possibly better than interest free, if you play your cards right...) - plus ending up 10 years into your mortgage, as a bonus, seems the moneysaving option, even if you pay a little over the odds on day 1...

Obviously, if you're going to stretch yourself right up to a 4.5x multiplier for the 75%, saving for the loan isn't going to be easy, but if you're sensible about it, saving for the repayment of this loan is easily doable...

RobertoMoir

Idiophreak wrote: »

I know this is an old thread, but I'm really struggling to get my head around people's attitude toward these schemes.

You say "I'm thinking about shared equity", the first thing they bark is "run away!". Then, when pressed, they say "Just save a deposit instead..."

So, it's entirely reasonable to expect someone to save a deposit for a house, but unreasonable to expect them to save to repay the loan, in this case?

Given that, in many areas, rent on a given property is higher than the mortgage repayment on the same place, it seems saving to repay an interest free loan of the same amount (in fact, possibly better than interest free, if you play your cards right...) - plus ending up 10 years into your mortgage, as a bonus, seems the moneysaving option, even if you pay a little over the odds on day 1...

Obviously, if you're going to stretch yourself right up to a 4.5x multiplier for the 75%, saving for the loan isn't going to be easy, but if you're sensible about it, saving for the repayment of this loan is easily doable...

Well that's the whole crux of the matter isn't it. "Obviously if you're going to stretch yourself"... most of the people who ask about it appear to be doing exactly that.

Also there's the fact that shared equity schemes that are most commonly seen on new build are done to artificially inflate the price of the new house over the market value.

I myself wouldn't say that shared equity schemes can never work. A friend of mine is using one and is "doing quite well with it thank you!". However, they often seem to be presented as a panacea which they're clearly not, or at least a way for people to stretch themselves into buying a house that they can't really afford, which as you note yourself has problems.

BlueIsTheColour

Grrr I just wrote a post and my stupid laptop crashed again....

I know this is an old thread but was hoping that people may have some experience now of selling on after buying under this scheme?

I wish we had never bought this god damn flat but we did, we now hate it and it has played a part in the breakdown of our relationship, hence the need to now sell....

Trouble is, its in about £30k of negative equity and we need to sell quick smart or face repossession, as the reality is, I cant afford to maintain the mortgage alone.

I was just wondering if anyone had any stories to share that would be helpful? I would really appreciate any help

Thanks in advance

tanyafelts

We are currently having mortgage application problems hue to being told we had been credit ok'd by the Mortgage Advisor company we were advised we had go through with Barretts on the exact same scheme due to the Mortgage advisors initially telling us that we had the mortgage fully approved to then be told it hadn't and they didnt know why. We contacted the bank they were doing the mortgage with who informed us that the forms were not correctly filled out and certain things didnt add up because address formats were different, figures were different etc. The mortgage advisor company also told our solicitors it was ok and they did all the paperwork ready. These mortgage advisors are called New Homes Mortgages - DO NOT USE THEM! We are not trying to fix the application faults with Halifax direct and due to the mess we now have to got to the underwriters who we have been informed tend to be harsh and our chances of it being ok is small, meaning we loose all £1,500 we have paid out to solicitors, Newhomes Mortgages fee etc! - thats if the FSA are not able to collect if from New Homes for false information. If you do the scheme is a very good idea but do go to the bank yourselves, so you dont have the same problems as us.

BlueIsTheColour

Sorry about your problems, my advice to you if you are able is run away from this scheme as fast as it is possible too. They over-value the properties and your ability to release the equity in year 10 will be minimal.

Its the worst thing we have ever done, and has brought about the demise of our relationship through the strain of feeling trapped in a place that we cant get out of, unless we get repossessed and go bankrupt.

I know you may well lose £1500 and thats bad, but compare that to the possible £25000 we are going to owe them even if we can actually sell this place, which I very much doubt!

brit1234

Your likely to over pay by 25% with these schemes, barrats must be laughing with all the suckers for these.

They are the real reason for the price increases as they are attracting people with 0 deposits. More 100-125% mortgages on a over vaued property, stay well clear and save a deposit like the rest of us.