New choice home buy

BECD_2

I am trying to buy through the Mychoice homebuy scheme with Thames Valley at the moment, so thought I would share what I have experienced so far.

The new schemes were due to be released on 1st April but no information was sent out to me until the beggining of June and everytime I called to see the progress I was told it would be another week.

I think that I have applied to the correct people as I currently live and work in surrey covered by Thames Valley but the flat I propose to buy is in an area picked up by Moat. I am not a key worker (property needs to be within an hours commute of place of work) but just someone trying to get on the property ladder.

I have been advised that if you are applying for anything more than £70,000 (even if this is less than 50% of the property value) then this could cause problems. I think your outgoings including the mortgage and loan payment (1.5% of the total loan spread over 12 months) need to be less than 50% of your income. Apparently they are also looking for varied percentages so the lower percent loan you apply for the more likely it is to be accepted.

I had my initial approval letter, found a property and tried to contact Thames Valley to give them brief details, but have not been able to speak to anyone for a week. I appreciate they are busy but the delays could jeapordise my position as a first time buyer who is meant to be ready to move ASAP! On the advise of my financial advisor I have sent them all the property details and my financial information anyway and started completing mortgage application forms etc ready for when they give me the go ahead (fingers crossed!).

My financial advisor is very helpful and has told me to continually bombard thames valley until I get a response as intial impressions would suggest they are not turning around applications at the speed expected.

I understand the comments in respect of waiting around to see how much the house prices fall but I see it as rather than paying someone elses mortgage (currently renting) I might as well pay my own .

The scheme in theory seems good for single/couple first time buyers on average salaries who are looking for a modest property that they can stay in for a few years?

I'll post further updates as and when they happen!

wheresmydoshat

"possibly a lucky escape? - in a while you'll be able to get the house you want without these schemes...."

agreed. the only downfall is that the scheme money meant we had no worries over me being in temp work.

geoffky

IF you cannot afford a holiday you don't go..why is it poor people think they should have a house rather than educate themselves more and save? these schemes are going to be a nightmare in the next few years as every tom !!!!!! and harry move in them..if houses are not affordable to you now wait until they do become affordable ie 3.5 times income...they will have to become affordable again ..simple economics dictate this..

wheresmydoshat

save your comments for the unemployed who are sitting in 3 bedroom council houses.

did i miss the part where if you can't afford a 20k deposit you are automatically poor ?

educate yourself sir.

rgsoton

Hi people

Really good stuff on here, thanks.

I have a question...we are having to move from our rented property and we'd like to buy (waiting is not an option!). We are FTBs. We can access upto £130k. This of course could buy somewhere but not where / what we'd like. I know with the homebuy scheme it's not about getting a dream home but to help FTBs. Would the ownchoice homebuy scheme do you think say that we can access eough to buy therefore don't qualify??

Thanks, people.

beingjdc

Depends where you live, it's very generous as far as I can tell - I presume when you say you can access £130k you mean you can borrow £130k, not that you have £130k of your own that you can use?

Even so, if I was looking to spend £130k, I'd wait six months however much of a 'non-option' you think it is, you'll save around £13,000 even according to the banks' own predictions - about £20 a week off the mortgage for life.

wheresmydoshat

hi,

with homebuy they will look at your earnings and savings (u are allowed to keep back 10k) and compare to expenditure.

once they have this they look at average house prices in your area.

we are allowed a purchased price of upto 215k, which is a bit of a stretch i have to admit.

it seems a fine line between what you can and can't afford.

rgsoton

Thanks for your replies. I do have a couple of questions...

We live in / looking to buy in South East. We have an (inherited) deposit of £40k plus borrowing £90k mortgage. Don't know how this situation with the deposit will affect the Homebuy option?

Are there any obvious disadvantages to the scheme (putting aside when we buy)?

Is it fixed 1.5% annual Interest for the life of the loan or am I getting confused?

Do you pay Interest only for the first year?

What's this about £1500 cashback?

What other costs are involved?

Is there worth in (if possible) working out how much I will be paying back in total?

Any percentage decrease / increase when we sell would go to the (equity loan) lender?

Lots of questions I know!

Thanks

wymondham

BECD wrote: »

I understand the comments in respect of waiting around to see how much the house prices fall but I see it as rather than paying someone elses mortgage (currently renting) I might as well pay my own

As long as you understand the consequences of this in the current economic climate!

wheresmydoshat

We live in / looking to buy in South East. We have an (inherited) deposit of £40k plus borrowing £90k mortgage. Don't know how this situation with the deposit will affect the Homebuy option?

A lot would depend on your income, if they feel your joint income would allow you to easily get the rest of your mortgage then they're unlikely to help you out.

Are there any obvious disadvantages to the scheme (putting aside when we buy)?

The fee's you pay increase each year, which could become quite expensive after a few years if you salaries have not increased. Also, you are restriced to Repayment initially.

Is it fixed 1.5% annual Interest for the life of the loan or am I getting confused?

I believe it goes up by RPI plus 1% every year, which seems to me to be quite a bit.

Do you pay Interest only for the first year?

Repayment, as far as I am aware. You can change it when you remortgage tho.

What's this about £1500 cashback?

???? no idea

What other costs are involved?

Just usual fee's you would incur buying a house.

Is there worth in (if possible) working out how much I will be paying back in total?

Depends how long you think you'll be happy in the house. And whether they extra cash you paying could go towards you going interest only by yourselves initially until you are better off and can do repayment.

Any percentage decrease / increase when we sell would go to the (equity loan) lender?

If your house sold for 100k more in 25 years time, they would get what they lent you, plus 17.5% (or whatever % they own) of that 100k.


For us personally the advantage of the scheme is we can get our 2nd home 1st time round (if that makes sense) so won't be needing to move for longer.