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What Are The Catches With This Scheme

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well it can really hurt when you pee for weeks afterwards, but after that you'll feel more manly and have better performance

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Looks horribly complex, it's some kind of Government led scheme to avoid the restrictions

of needing a deposit.

bnr_who_can_apply.gif

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After five years you will be charged a fixed interest rate of 1.75% on your Ownhome loan each year. After a further five years your interest will be increased to a fixed rate of 3.75% for the rest of the Ownhome loan period.

This is interest only and no capital is repaid through these monthly payments to reduce the size of your Ownhome loan. The interest is charged on the original monetary value of the Ownhome loan, so if you originally borrow £25,000 you will pay interest on £25,000 regardless of how much the equity is worth in the future.

After 25 years (or the term of your mortgage if sooner) you will have to repay the loan, calculated on the value of your home at the time of repayment.

However, if when you sell your house it is worth £300,000 you will owe Places for People 40% of the value, which means that you will need to pay back £120,000.

You will need to have a repayment strategy, which Places for People will discuss with you when you apply for an Ownhome loan.

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yes - from what i hear, they work out your max loan available, THEN ADD the 20-40% "deposit". it seems to be overstretching people. it might benefit some, but could leave them very short when rates revert.

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I can't see any benefits for tax payers

Do you mean people who take up the offer who are taxcpayers or taxpayers in general?

I was expecting a number of replies to this pointing out the pitfalls, but very little so far, Come on you bears, pull this apart! Please!

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After 25 years (or the term of your mortgage if sooner) you will have to repay the loan, calculated on the value of your home at the time of repayment.

However, if when you sell your house it is worth £300,000 you will owe Places for People 40% of the value, which means that you will need to pay back £120,000.

Huh? Clear as mud.

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Huh? Clear as mud.

It seems pretty clear to me...

You get given 40% equity loan, and when you sell the property you have to pay back 40%... seems fair enough to me (might not be a great deal if HP increase 15% a year, but still seems fair in the sense that they aren't hiding it)

SBJ

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It could be good for some people, the rules are made clearer on the main government site, this one is an agent of the scheme.

http://www.homesandcommunities.co.uk/home_buy.htm

New Build HomeBuy (formerly known as Shared Ownership)

you share ownership of your home with a housing association, paying a mortgage on the part you own plus affordable rent on the portion you don’t own

Open Market HomeBuy

you take out a conventional mortgage to fund part of your property purchase and a low-interest equity loan to cover the rest

Social HomeBuy

housing association and local authority tenants buy their home on a shared ownership basis or outright, with a discount on the share being purchased

HomeBuy Direct

you buy a selected New Build HomeBuy property with the assistance of an equity loan

Rent to HomeBuy

you pay reduced rent on a new build home for up to five years, to help you save for a deposit and purchase the property.

Right to Acquire

for housing association tenants

Right to Buy or Preserved Right to Buy

for local authority tenants or tenants who have been transferred from a local authority to a housing association.

Might be worth building a simple table so people can exclude schemes which don't apply then calculate

basic results of mortgage, interest and repayment schemes.

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a couple of people on HPC have used this scheme, there was a thread on it a while ago. I think you can use it to get one over on the gov...

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