New choice home buy

mariagti

tinkerbell1985 wrote: »

That looks like Newbuild Homebuy (Shared Ownership), so is different to the My Choice and Ownhome. The £150,000 will be the whole property value and you will raise a mortgage for 35% of that. You can then 'staircase' up to own a higher percentage or the full 100% at a later date if you wish. You will still need to register with Moat though.

Oppps i went through the link i didnt know id gone onto shared ownership. So with my choice and ownhome can you choose any house/flat you want on the market? Or can you only choose from a list of what they have?

If i was on the housing register could i

E.g Theres a 1 bed flat for £130,000 on rightmove, could i use the scheme to buy that?

sorry for all the questions! :rolleyes:

BiggaThanBen

tinkerbell1985 wrote: »

The GLO (Government Loan Only) scheme was very good, however, you were only able to borrow up to 17.5% of the property value.

This was later increased to 25% ..

tinkerbell1985

mariagti wrote: »

Oppps i went through the link i didnt know id gone onto shared ownership. So with my choice and ownhome can you choose any house/flat you want on the market? Or can you only choose from a list of what they have?

If i was on the housing register could i

E.g Theres a 1 bed flat for £130,000 on rightmove, could i use the scheme to buy that?

sorry for all the questions! :rolleyes:

Yeah, Shared Ownership will be from a list of properties that Moat (or another Zone Agent) have. With My Choice and Ownhome, you can choose a property on the open market, through an estate agent and use the funding from My Choice or Ownhome to help you afford the full price. So like the one you've seen on Rightmove!

tinkerbell1985

BiggaThanBen wrote: »

This was later increased to 25% ..

In the South, there were 3 schemes available, until April this year:

GLO - up to 17.5% loan -any high street mortgage lender

Expanded Open Market - 25% loan (12.5% from government, + 12.5% from mortgage lender as an equity loan) Only Halifax, Nationwide and Advantage were able to do this loan & mortgage.

Yorkshire Building Society's Open Market - 32.5% (17.5% from government + 15% from Yorkshire Building Society)

Now it's My Choice Homebuy (15-50% loan) and Ownhome (20-40% loan)

As I said earlier, this was the case in the South in the Homebuy Agency I work for, I know it was similar across the country, but can't guarantee it was exactly the same figures. Although, if anything the loan amounts would have been higher down here due to high property prices!

BiggaThanBen

tinkerbell1985 wrote: »

In the South, there were 3 schemes available, until April this year:

GLO - up to 17.5% loan -any high street mortgage lender

http://www.moat.co.uk/MoatWeb/Moatinbusiness/Making+sense+of+Open+Market+HomeBuy

Some more encouraging news came through last week (on 24 October 2007) and we can now extend the 17.5% equity loan up to 25% on the OMHB GLO product.

I was under impression that was a global change to the product, but it was not advertised broadly; anyway it is expired now ...

tinkerbell1985, if you work with this schemes, could you comment on these points:
1) What happens to the loan if house prices fall and you have to sell the property, how is it all calculated ?
2) What if you get a new job many miles away, will it be possible to sublet the OHMB property for a year for example .. ?
3) If you bought a 200K property with 50K GLO loan, during 2 years paid 50K towards capital, but the property costs 175K now what happens if you decide to re-mortgage it (e.g. simply switch to fixed deal) ?

Thanks

mikthe20

BiggaThanBen wrote: »

Well, I assume it is better to have no economy than have people dying and killing each other on streets ...



In fact, these schemes are not limited to Key Workers, actually conditions are ofter worse for Key Workers than in schemes for everyone - if you stop being a key worker you have to repay the loan within 3 years, even if you are not selling the property ..

Thank you for your answers. I don't want to get into a debate but we've made our points. My fundamental point is that really the market should not need false intervention by the government to subisidise people who cannot afford houses yet have decent jobs be they in public services or private companies. By subsidising it, these schemes help prop house prices up that otherwise would/should be lower, to the benefit of all of them. As such, I think the quicker these schemes disappear (and I don't think getting poorly-paid people to buy part of an over-priced property because that's all they can afford is actually helping those people at all), the quicker house prices will become more sensible for the common working person.

tinkerbell1985

BiggaThanBen wrote: »

http://www.moat.co.uk/MoatWeb/Moatinbusiness/Making+sense+of+Open+Market+HomeBuy



I was under impression that was a global change to the product, but it was not advertised broadly; anyway it is expired now ...

tinkerbell1985, if you work with this schemes, could you comment on these points:
1) What happens to the loan if house prices fall and you have to sell the property, how is it all calculated ?
2) What if you get a new job many miles away, will it be possible to sublet the OHMB property for a year for example .. ?
3) If you bought a 200K property with 50K GLO loan, during 2 years paid 50K towards capital, but the property costs 175K now what happens if you decide to re-mortgage it (e.g. simply switch to fixed deal) ?

Thanks

From the looks of the Moat website, it was extended in just their zone, not all over...

"Some more encouraging news came through last week (on 24 October 2007) and we can now extend the 17.5% equity loan up to 25% on the OMHB GLO product. This helps to address the key issue of affordability in the areas where Moat is HomeBuy Agent - Essex, Kent and Sussex."

Unfortunately, it looks like that wasn't all over - but it would have been good had it been extended all over.

In answer to your questions, I will answer as best I can, to my knowledge of the schemes in the area I cover:

1. If house prices fall - When you sell the property on, it has to be valued at current market value, by an independant surveyor. If you borrow 25%, you have to repay 25% of the new property value. Any loan from the government will adjust according to the value of the property - so if house prices fall, the amount you pay back to the goverment will fall too, as it goes by the % you borrowed, not a fixed amount. (On the old versions of the scheme, where there was a lenders equity loan alongside the government's loan, this would be the same for the governments loan, but normally the mortgage lender would require full payment of the amount borrowed in prices dropped, but a share in the equity if they rose - so doesn't sound fair, but they are protecting their investment)

2. Subletting property - this is not normally allowed. Sometimes if a keyworker is forced to move for their job ie. a soldier is relocated abroad, it can be possible to sub-let. Permission would need to be gained from the company who originally lent you the money (the Zone Agent for MyChoice or Places For People for OwnHome) Sometimes they would request that you would need to sublet the property to someone considered a priority for the schemes, such as another KW, but I think this depends!

3. Remortgaging - I'm afraid I don't think I can answer this question fully. An IFA would be the best person to speak to, we don't get heavily involved with the mortgage side of things. The IFAs do that for us. All I can say about remortgaging, is that when you do remortgage, you would need the permission from the loan lender, you would ned to have it valued, it can normally only be done to change to a better deal or to further borrow for home improvements only(not to pay off or consolidate other loans), it would need to be with a high street mortgage lender who are prepared to accept a 2nd charge on the property, or you can remortgage to pay off the loan. With regards to exactly what happens in your question, I wouldn't like to say for sure.

Does this help? Are you looking into going through the scheme yourself?

tinkerbell1985

Oh and although I work with the schemes and think they are very good, I can kinda see Mikthe20's point about the schemes propping the house prices up - but I think it's a '6 of one, half a dozen of the other' kind of situation!

BiggaThanBen

tinkerbell1985 wrote: »

3. Remortgaging - I'm afraid I don't think I can answer this question fully. An IFA would be the best person to speak to, we don't get heavily involved with the mortgage side of things. The IFAs do that for us. All I can say about remortgaging, is that when you do remortgage, you would need the permission from the loan lender, you would ned to have it valued, it can normally only be done to change to a better deal or to further borrow for home improvements only(not to pay off or consolidate other loans), it would need to be with a high street mortgage lender who are prepared to accept a 2nd charge on the property, or you can remortgage to pay off the loan.

Thanks for your answers !

In 3), I meant this: if GLO loan is £50K and your equity is £50K(60, 70 ..) at the time of remortgaging, will HA ask to repay the loan ?

tinkerbell1985

Ah, I see! No, they wouldn't force you to repay the loan at any time like that - it is up to you to repay as and when you're ready. You would have to have it valued, so they would be aware of what potential equity you had, but could not force you to repay.

Even in situations where , for instance, if house prices rocketed up or you won the lottery and could afford to pay off the loan, they are not able to force that. Although if you did win the lottery, it would be silly not to pay it back of course and a little immoral, seeming as that money would be recycled to help someone else again...but I'm rambling now and have gone off topic a bit!