Jump to content
House Price Crash Forum
Sign in to follow this  
jplevene

How It Works - Government Backing 5% Deposit For First Time Buyers

Recommended Posts

Found an explanation for the proposed first time buyer 5% deposit.

http://mortgage-calculator-free.co.uk/blog/2013/09/30/government-backing-5-deposit-first-time-buyers/

Will you still be considered a first time buyer if you owned a property, sold it, moved into rental and after that bought a new property?

On top of all the spelling mistakes, just about everything in that 'explanation' is incorrect.

Share this post


Link to post
Share on other sites

On top of all the spelling mistakes, just about everything in that 'explanation' is incorrect.

Did a spell check with Word, no spelling mistakes.

Checked against other news sources, 100% accurate

See -

Guardian

BBC

Sky

Notice in the Sky article "The second stage of the Help to Buy scheme aims to boost mortgage availability by reducing the risk for lenders because the Government takes on the risk of default when it guarantees a proportion of a loan."

This is the second phase of the Help to Buy and the government UNDERWRITES the rest of the deposit, not gives it.

Think a few people here need to go back to school and learn to read !!!

Share this post


Link to post
Share on other sites

Did a spell check with Word, no spelling mistakes.

Checked against other news sources, 100% accurate

See -

Guardian

BBC

Sky

Notice in the Sky article "The second stage of the Help to Buy scheme aims to boost mortgage availability by reducing the risk for lenders because the Government takes on the risk of default when it guarantees a proportion of a loan."

This is the second phase of the Help to Buy and the government UNDERWRITES the rest of the deposit, not gives it.

Think a few people here need to go back to school and learn to read !!!

What does this mean?:

If the bank has to reposes the house and only manages to sell it for £90,000, the Government will pay the bank the shortfall of £10,000, infact they would go upto £15,000 in this case.

Is it your blog btw?

edit question.

Edited by The B.L.T.

Share this post


Link to post
Share on other sites

Is it your blog btw?

edit question.

Yes, I did the original local hosted website (on my computer only, not the web) as I needed to calculate mortgage breakdowns and the rest were not giving me enough info.

A friend then wanted a mortgage and we used the tool I wrote, he said it was good and that I should put it online. When I had some spare time I beefed up the look and posted it free online as http://mortgage-calculator-free.co.uk/ for anybody to use. I don't make any money from it, except for the £1.60 from the Google adds for the past month, these are on all my websites by default.

Had a few people thank me, concept is mainly for friends to use when they want to re-mortgage.

Surprisingly the site gets loads of hits, so I might spend some time on it and make it look better if I get the chance. When I do have the time, I will ask all here for any suggestions and invite bloggers.

Share this post


Link to post
Share on other sites

Did a spell check with Word, no spelling mistakes.

Checked against other news sources, 100% accurate

See -

Guardian

BBC

Sky

Notice in the Sky article "The second stage of the Help to Buy scheme aims to boost mortgage availability by reducing the risk for lenders because the Government takes on the risk of default when it guarantees a proportion of a loan."

This is the second phase of the Help to Buy and the government UNDERWRITES the rest of the deposit, not gives it.

Think a few people here need to go back to school and learn to read !!!

And I think someone needs to develop a sense of integrity - the current version has been heavily edited from yesterday.

For example, yesterday it said that the government would underwrite 20% of the loan.

And editing reader comments to suit? WTF?

[Oh, and BTW it's still wrong, and this time I've taken a screenshot so that the mistake cannot be covered up.]

Share this post


Link to post
Share on other sites

It's all here :- https://www.gov.uk/government/news/help-to-buy-mortgage-guarantee-available-3-months-early

I think they are making it up as they go along as it seems to change so often. :lol:

A scheme to help thousands of people buy their own home will be launched next week - three months earlier than planned.

The scheme was due to start in January 2014 but the government has announced that people will be able to start applying for the new mortgage guarantee from next week.

Several high street banks will be offering the new Help to Buy mortgages to customers, ranging from 80 to 95 per cent of the property’s value.

The mortgages – backed by the government - will help thousands of people buy new or existing homes up to a maximum value of £600,000.

It is aimed at people who cannot get on the property ladder – or move to a new home – because they cannot afford the large deposit required, often up to 20 per cent.

Under the new mortgage guarantee scheme, the buyer would only need a 5 per cent deposit.

The government and the bank then jointly guarantees up to the next 15 per cent of the property’s value, in return for a fee paid for by the lender.

To be able to offer the guarantees ahead of schedule, the government will be allowing lenders to start writing loans that will become part of the scheme once it opens in January.

Because lenders know that they will be able to purchase a guarantee on these loans when the scheme opens in January, it means that they are able to offer high loan to value mortgages, much sooner.

Only repayment mortgages will be offered under the scheme.

There will be tough checks to make sure buyers can afford their mortgage payments and the borrowers income will be verified.

The scheme will not include interest-only or self-certified mortgages.

The new mortgages will not be available to people with a history of difficulties making debt repayments.

Official statistics show that mortgage lending is around half the level it was before the economic crisis, even though mortgage rates are at their lowest for five years.

Announced by the Chancellor at Budget 2013, the Help to Buy scheme has two parts, equity loan and mortgage guarantee.

Under the equity loan scheme, the government provides a loan of up to 20% of the value of a new build home, interest free for the first five years.

The Help to Buy: mortgage guarantee scheme will be available for three years up to January 2017. Every September the government and the Bank of England Financial Policy Committee will review the impact of the scheme and examine whether the fees or the price cap should be adjusted. If any future government proposed to extend the scheme beyond its three year life the FPC would need to agree.

Share this post


Link to post
Share on other sites

And I think someone needs to develop a sense of integrity - the current version has been heavily edited from yesterday.

For example, yesterday it said that the government would underwrite 20% of the loan.

And editing reader comments to suit? WTF?

[Oh, and BTW it's still wrong, and this time I've taken a screenshot so that the mistake cannot be covered up.]

Yes, the OP stated this in the original post:

Found an explanation for the proposed first time buyer 5% deposit.

http://mortgage-calculator-free.co.uk/blog/2013/09/30/government-backing-5-deposit-first-time-buyers/

Will you still be considered a first time buyer if you owned a property, sold it, moved into rental and after that bought a new property?

but then admits it is their own blog!

OP, why have you approached this in this manner?

Are you willing to address the issues of modifying comments too?

Bizarre.

Share this post


Link to post
Share on other sites

Mistakes ....

Good news for first time buyers, in that the Government is going to make it easier for first time buyers to get on the property ladder buy only having to give a 5% deposit on their property purchase.

:lol:

Share this post


Link to post
Share on other sites

I have to admit i'm tempted.

As a tax payer i'm ultimately going to be paying my share towards this farce in one way or another so after 7 years of scraping together a 25% deposit I might just get a house with 5% and keep the remainder in savings instead. If it all goes tits up at the end of a 5 year fix then at least i've only risked 20% of my hard saved capital.

The show stopper for me is whether as a result of these banks buying these guarantee's, they offer interest rates that are on par with a 20% cash deposit.

Share this post


Link to post
Share on other sites

I have to admit i'm tempted.

As a tax payer i'm ultimately going to be paying my share towards this farce in one way or another so after 7 years of scraping together a 25% deposit I might just get a house with 5% and keep the remainder in savings instead. If it all goes tits up at the end of a 5 year fix then at least i've only risked 20% of my hard saved capital.

The show stopper for me is whether as a result of these banks buying these guarantee's, they offer interest rates that are on par with a 20% cash deposit.

Eh? You've still risked your capital, as you'll be on the hook for the full amount. You just won't have to pay interest on the 15% for five years. If you expect hyper-wage-inflation then it might be a good deal.

Share this post


Link to post
Share on other sites

It looks like a scheme to allow Gold Gen to sell their houses at inflated prices.

With young people paying for the second 15% tranche of the loss.

So if a house sells for £600,000 and house prices drop to £300,000, it looks like the seller goes off happy with £600,000, the buyer gets bankrupted, the young have to pay £90,000 in government guaranteed losses through their taxes, and the bank gets a bailout for £180,000, which the young also have to pay through their taxes.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   206 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.