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juvenal

The Sun Punts Home Buy Schemes

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sounds nice - also only targetted at new builds so:

(1) encourages long term building of new houses

(2) not encouraging speculation (hopefully) so building communities

(3) it's not shared equity! hallelujah!

I'd use thismyself frankly if is is going when I want to buy a place, won't sniff at a 0% loan on the deposit

edit: drawbacks -

how much do newbuilds fall in value after purchase????

can you sell this house if you pay off the initial loan within the term? early repayment charges?

Edited by Si1

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It seems that eventually the buyer still has to pay the 30% of "market value" loan as a proportion presumably when the apparently obligatory mortgage towards the 70% is paid off - either on sale or at the end of the mortgage term. Seemingly they can pay bits off towards the true 100% as time goes along. After 5 years it looks like there's an annual fee (interest) on the 30% loan starting at 1.75% - inflation adjusted each year.

The main advantage seems to be that It allows buyers to live in/buy something that they couldn't otherwise afford but it appears to still expose them to the risk of negative equity on all of their 70% if house prices fall - depending on their deposit for the 70%.

As I say that's what it looks like to me but it might well be something quite different. I am not offering financial advice. Do your own research. I might be wrong etc etc etc ;)

Edited by billybong

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sounds nice - also only targetted at new builds so:

(1) encourages long term building of new houses

(2) not encouraging speculation (hopefully) so building communities

(3) it's not shared equity! hallelujah!

I'd use thismyself frankly if is is going when I want to buy a place, won't sniff at a 0% loan on the deposit

edit: drawbacks -

how much do newbuilds fall in value after purchase????

can you sell this house if you pay off the initial loan within the term? early repayment charges?

Have a look at the article again and read how they describe the way they calculate the deposit. It jumped off the page at me.

30% of the asking price. Asking price. I know, lets create a scheme to help property developers maintain their huge margins. Funded by the taxpayer.

Frankly if someone in Telford earning 'up to £60k' needs an interest free deposit to help them buy a house then the market is fecked!

Let the prices drop, dont prop them up with targeted easy credit.

Edited by Caveat Mortgagor

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Have a look at the article again and read how they describe the way they calculate the deposit. It jumped off the page at me.

30% of the asking price.

The actual text says 30% of valuation

tim

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The actual text says 30% of valuation

tim

interesting - the existence of a thrid party (the housing assoc rep overseeing the interest-free loan) may well limit the ability to aggresively negotiate a lower price from the builder, and effectively negate the benefits of an interest free loan

one other thing bothrs me - when you pay the interest free loan off, it appears you pay in proportion, not in absolute terms, the balance of the loan seems to go up if the value of the property goes up after it is taken out ?

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Apparently:

Purchasers buy 70% minimum. A loan of up to 30% is provided to assist with the purchase - no payments are needed on this for 5 years then there's a fee of 1.75% that's annually increased with inflation.

You have to raise a mortgage to purchase through this scheme. You can also use savings to contribute as a deposit towards your share (of 70%).

After purchase you can buy out the 30% (based on the current market value) until you have 100%.

New homes on selected developments only.

Edited by billybong

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The actual text says 30% of valuation

tim

Strapline under picture says Asking price

Text says purchase price!

Tim, what you have done is to illustrate my point better than i could with mere words.

You are an intelligent person and you have misread the blurb by associating the asking price(under pic) and purchase price (in text) with valuation.

Imagine how powerful a tool this is to confuse the less financially cautious members of society (ie those looking to buy whilst there are warnings in every section of the media that prices will fall) into believing the asking price is the price you must pay!

Edited by Caveat Mortgagor

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a friend of ours was told that the 30% is a free loan and never need paying back...

still, it comes out of all our taxes, so I guess, as we have a deficit and just print more, I suppose its free in that sense.

course the loan would be totally free if the house was sold at market value..ie, a price someone could afford...ie, 30% lower.

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Apparently If you don't sell your home, you have to pay back the 30% equity loan after 25 years.

It's for FTBers, keyworkers etc etc

The home's title is in your name and the value of the 30% equity loan rises and falls depending on the value of your home. In the 6th year you pay 1.75% of the 30% loan as a "fee" and that 1.75% "fee" increases annually at RPI +1%. The more the loan is worth the higher the fee.

Apparently on sale the money that the buyer pays for your home is first used to pay off your mortgage, then the equity loan.

If your home has dropped in value, there may not be enough money left after your mortgage costs to pay back the equity loan.

If this happens, apparently you won’t have to pay back the rest of the money owed on the equity loan - so in that circumstance perhaps it's true to say the equity loan doesn't have to be (all) paid off. Sale has to be approved by the Homebuy agent whatever that might mean.

Seemingly the taxpayer bails out any losses yet again and the builder get to sell another overpriced box.

Edited by billybong

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Apparently If you don't sell your home, you have to pay back the 30% equity loan after 25 years.

It's for FTBers, keyworkers etc etc

The home's title is in your name and the value of the 30% equity loan rises and falls depending on the value of your home. In the 6th year you pay 1.75% of the 30% loan as a "fee" and that 1.75% "fee" increases annually at RPI +1%. The more the loan is worth the higher the fee.

Apparently on sale the money that the buyer pays for your home is first used to pay off your mortgage, then the equity loan.

If your home has dropped in value, there may not be enough money left after your mortgage costs to pay back the equity loan.

If this happens, apparently you won’t have to pay back the rest of the money owed on the equity loan - so in that circumstance perhaps it's true to say the equity loan doesn't have to be (all) paid off. Sale has to be approved by the Homebuy agent whatever that might mean.

Seemingly the taxpayer bails out any losses yet again and the builder get to sell another overpriced box.

indeed...the 100% mortgage is dead...LONGLIVE the 100% mortgage

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Apparently If you don't sell your home, you have to pay back the 30% equity loan after 25 years.

It's for FTBers, keyworkers etc etc

The home's title is in your name and the value of the 30% equity loan rises and falls depending on the value of your home. In the 6th year you pay 1.75% of the 30% loan as a "fee" and that 1.75% "fee" increases annually at RPI +1%. The more the loan is worth the higher the fee.

Apparently on sale the money that the buyer pays for your home is first used to pay off your mortgage, then the equity loan.

If your home has dropped in value, there may not be enough money left after your mortgage costs to pay back the equity loan.

If this happens, apparently you won’t have to pay back the rest of the money owed on the equity loan - so in that circumstance perhaps it's true to say the equity loan doesn't have to be (all) paid off. Sale has to be approved by the Homebuy agent whatever that might mean.

Seemingly the taxpayer bails out any losses yet again and the builder get to sell another overpriced box.

to be honest, it sounds a sensible piece of social engineering to allow FTBs to buy nice houses and put a bottom beneath the fallking market, as well as keeping builders going so as to continue dribbling properties into the pool and keep up with population growth

sounds like a coalition thing - homebuy direct - very Clegg-Cameron

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It's just a government subsidy to builders to allow them to shift surplus stock without knocking down the price by 30%. The taxpayer stumps up 30% of the builder's demand in the form of an interest free "loan" to a prospective purchaser. My guess is that if they refuse to repay it will just be written off without too much fuss. . Imagine the principle applied to any other industry or product and you immediately see it for what it is. The problem is that to keep prices up the government will have to escalate the share it pays: 40% next year and so on.

Edited by ingermany

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to be honest, it sounds a sensible piece of social engineering to allow FTBs to buy nice houses and put a bottom beneath the fallking market, as well as keeping builders going so as to continue dribbling properties into the pool and keep up with population growth

sounds like a coalition thing - homebuy direct - very Clegg-Cameron

thing is, its a nulab invention...only KEYWORKERS, ftbs and social housing people are eligable....frack the private rented. frack wealth creating workers.

the money for many of these "schemes" ran out....Im sure there cant be much left.

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thing is, its a nulab invention...only KEYWORKERS, ftbs and social housing people are eligable....frack the private rented. frack wealth creating workers.

the money for many of these "schemes" ran out....Im sure there cant be much left.

ooops you're right: (still think it is the best of those schemes tho')

(wikipedia)

  • HomeBuy Direct is a new form of shared ownership introduced in 2009, under which the government and a housing developer jointly fund an equity loan of 30% of the valuation, so that the purchaser only needs to pay a mortgage on 70% of the value. If the purchaser buys an additional share, all three parties participate in any increase in value. The HCA allocated £300 million to the scheme for 2009—2011, and 10,000 homes are available under the initiative.[1]

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In the absence of any regulation on salary multiples, and the only proposals for mortgage regulation seemingly being on LTV's, is anyone else worried that this scheme effectively attempts to undermine any propoesed regulation of the mortgage industry?

As i see it, this merely transfers some of the risk away from the lenders and onto the Govt, and enables greater volumes of said risk. All at the cost of the taxpayer. Nevermind though, as long as this money is spent on new builds and preferably flats ideally in dodgy parts of cities I am sure that the hard working taxpayer will never suffer.

Edited by Caveat Mortgagor

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Paying both a mortgage and a loan...

Sounds like a good idea.

Oh.. I see in that tiny print at the bottom it's an ad..

http://www.thesun.co.uk/sol/homepage/advertisement_feature/halifax/3122657/HomeBuy-Direct-scheme-helps-first-time-buyers-get-on-the-property-ladder.html

An ad? And it looks like a 'First Time Buyer Guide', like part of the paper that you pay money for. Hey, they wouldn't be trying to trick people, would they?

Naa, they would never do that. <_<

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Strapline under picture says Asking price

Text says purchase price!

Tim, what you have done is to illustrate my point better than i could with mere words.

You are an intelligent person and you have misread the blurb by associating the asking price(under pic) and purchase price (in text) with valuation.

Imagine how powerful a tool this is to confuse the less financially cautious members of society (ie those looking to buy whilst there are warnings in every section of the media that prices will fall) into believing the asking price is the price you must pay!

No.

the text says:

"By offering purchasers the chance to receive up to a 30 per cent loan on the value of their new home".

I accept that the line under the picture says "asking"

tim

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  • 141 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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