Homebuy Schemes

What it is

This scheme offers shared equity loans to help in the purchase of any home on the open market; this could be a second hand property or a new home from a private developer.

How it works

The client finds a suitable property, normally via an estate agents or a private developer, and applies for an equity loan for anywhere between 15 and 50 percent of the properties market value. There is a low monthly interest on the loan of 1.75 percent per annum, which annually increases in line with inflation. In order to purchase through this option, a client will most likely have to take out a mortgage in addition to using any savings to contribute to a deposit.

Options after buying through MyChoice HomeBuy

The home owner has the option of paying off the equity loan at any point during the mortgage term. Alternatively at the end of the mortgage, the equity loan must be paid off in full.

If the property is sold, the loan is redeemed as a proportion of the market value at the time of sale.

What it is

The HomeBuy Direct scheme offers equity loans towards the purchase of a new build property on selected developments.

How it works

The client buys at least 70 percent of the market value of the chosen property. The equity loan, which is anything up to 30 percent, gives the owner added assistance in the purchase of the home. In this scheme there are no payments of the loan for the first five years.

After the initial five year period there is a monthly interest of 1.75 percent which again increases annually in line with inflation, a mortgage will usually need to be taken out and used in conjunction with savings to initially pay for the deposit of the property.

Options after buying through HomeBuy Direct

There is the option to purchase additional shares of the property until the client owns 100 percent of the home; the price of the shares are calculated based on the market value of the property at the time of purchase.

If the property is to be sold, the equity loan is redeemed as a proportion of the market value of the property at the time of sale.

What it is

Social HomeBuy is a scheme available from some housing associations or local authorities. It is an option that provides tenants the opportunity to purchase a share in their rented properties.

How it works

Tenants have the option to buy a minimum initial share of 25 percent of their home, with the remaining equity remaining in the possession of the landlord. The landlord then reduces the rent according to the percentage of the un-owned equity. It is possible for the tenants to continue purchasing shares until 100 percent of the property is owned. The price of the shares is based on the market value of the property at the time of their purchase.

What are my options after buying through Social HomeBuy?

The staircasing process can come into play, by which the tenant gradually buys more and more of the property. As more of the property is purchased the rent is reduced proportionately.

If the owners of a property wish to sell their home, their share is marketed for sale through the housing association in order to allow other people in need of affordable housing the opportunity to own a low cost home. The property is resold at the market value at the time of sale.

If 100 percent of the property has been purchased, there may be service charges that still have to be paid, for more information on this ask the appropriate landlord.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
 
If you are considering any debt consolidation - Think carefully before securing other debts against your home.
 
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
 
We normally do not charge any fees for our mortgage advice as the majority of mortgage lenders will pay us a procuration fee for our work. We do offer a fee-based service should you prefer, which will cost no more than 0.35% of the mortgage advance. Any mortgage procuration fee would then be rebated to you on completion. Some lenders do not pay a procuration fee, so we will need to charge you a flat fee for our advice and administration, typically £499. We also reserve the right to charge an administration fee for mortgage applications below £100,000, to ensure that we can earn a minimum of £500 from a combination of commission, fees and other income from a mortgage application. Please ask us for more details.

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Easyswitch Mortgages and Easyswitch Insurance are trading names of Essex Mortgage Centre Limited. Essex Mortgage Centre Limited. Registered office : 3 Warners Mill, Silks Way, Braintree, Essex, CM7 3GB. Company Registration Number 6009105, registered in England and Wales.
 
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