Struggling to understand Home Buy Loan, does anyone have experience with this?

1122abc

In 2003, my parents took out a home buy loan of £35,000 for a £160k property with a mortgage. 

I have googled but I’m not quite understanding the loan. I also called the lender but they advised me to email them if I had queries but my emails have gone unanswered. We cannot find the initial contract that I assumed my parents had signed. 

1. Is there an end date for the loan to be repaid or is it only repaid when the property is sold?

2. The annual statement says "the amount you are required to repay when the loan comes to an end is linked to the value of your home at that time". What exactly does this mean? 

For example, if the property increased by £100,000 in value, what impact does this have on the £35,000 owed?

3. The letters also state that “you will have to pay our costs in discharging the security”. What does this mean in layman’s terms and how much is this on average?

4. Can the loan be repaid now, based on the current property value?

Thanks in advance for any replies 

user1977

Firstly, you're probably better posting this on the Mortgages board given you are asking about a mortgage product, and that's where the brokers and others with specialist knowledge hang out.

Also, it would help if you told us which lender it is, as that would help with the guessing what the terms of the product say.

You say your emails have gone unanswered - in what capacity were you contacting the lender? They're not going to chat to third parties about their customers' accounts, so unless you are attorney for your parents, or your parents have given specific authority for the lender to discuss their account with you, I wouldn't expect much of a response.

The exact answers to your questions will be in the paperwork which you don't have, but my best guesses are:

1. I would expect this is a product which only has to be repaid on sale.
2. Probably that it's proportionate to the property value - so if they borrowed 21.9% of the original value then they'll repay 21.9% of the sale price.
3. Usually a modest (and fixed) admin fee. Say a couple of hundred at most.
4. I would guess there's a means of doing so, yes.

1122abc

user1977 said:

Firstly, you're probably better posting this on the Mortgages board given you are asking about a mortgage product, and that's where the brokers and others with specialist knowledge hang out.

Also, it would help if you told us which lender it is, as that would help with the guessing what the terms of the product say.

You say your emails have gone unanswered - in what capacity were you contacting the lender? They're not going to chat to third parties about their customers' accounts, so unless you are attorney for your parents, or your parents have given specific authority for the lender to discuss their account with you, I wouldn't expect much of a response.

The exact answers to your questions will be in the paperwork which you don't have, but my best guesses are:

1. I would expect this is a product which only has to be repaid on sale.
2. Probably that it's proportionate to the property value - so if they borrowed 21.9% of the original value then they'll repay 21.9% of the sale price.
3. Usually a modest (and fixed) admin fee. Say a couple of hundred at most.
4. I would guess there's a means of doing so, yes.

Thanks for your reply. 

I wasn’t sure if it was a mortgage product because it was a loan from a lender called Notting Hill Genesis who are now providing Help To Buy loans which I assume are the same thing. 

My parents have written emails that I have helped them draft. 

Schwarzwald

Notting Hill Genesis is primarily a housing association.

and not very good in customer service unfortunatley.

on their website they state the following, seems to be a product of the past for them:

Received a HomeBuy loan?

HomeBuy (sometimes referred to as Keyworker HomeBuy, Starter Home Initiative HomeBuy or Open Market HomeBuy) was a scheme which allowed applicants to buy a home of their choice on the open market with the help of an equity loan from us.

The loan was calculated as a percentage of the property value and secured against the home as a second charge. This means that you’ll need to contact us if you:

• Are selling the property and paying back the equity loan
• Are remortgaging the property
• Are carrying out home improvements
• Would like permission to sublet the property
• Are extending the lease or purchasing the freehold
• Are changing, removing or adding names to the deeds.

eddddy

1122abc said:

In 2003, my parents took out a home buy loan of £35,000 for a £160k property with a mortgage. 

I have googled but I’m not quite understanding the loan. I also called the lender but they advised me to email them if I had queries but my emails have gone unanswered. We cannot find the initial contract that I assumed my parents had signed. 

1. Is there an end date for the loan to be repaid or is it only repaid when the property is sold?

2. The annual statement says "the amount you are required to repay when the loan comes to an end is linked to the value of your home at that time". What exactly does this mean? 

For example, if the property increased by £100,000 in value, what impact does this have on the £35,000 owed?

3. The letters also state that “you will have to pay our costs in discharging the security”. What does this mean in layman’s terms and how much is this on average?

4. Can the loan be repaid now, based on the current property value?

Thanks in advance for any replies 

If you haven't already done this, perhaps the best first step is to ask for a copy of the loan agreement and read that.

And/or ask for a copy of the documentation that your parents would have been given before taking out the loan - perhaps called something like a "Product Summary" or "Technical Guide" or similar.

Once you understand how the loan works, it will be easier for you to ask the "right" questions.


For example, it might be that questions you're asking don't make sense in relation to the way the product works. Or the documents you get might explain everything anyway.