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What is Open Market HomeBuy
– government loan only? |
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The government only equity loan through Open Market HomeBuy
offers you the opportunity to purchase a property on the open
market. This product offers an average equity loan of 17.5%
of the purchase price, which can be used in conjunction with
a conventional mortgage or mortgage and deposit from any qualified
lender regulated by the Financial Services Authority.
The average 17.5% equity loan is £50,000, and the equity
loan offered will be subject to individuals affordability.
Purchasers must maximise their mortgage and will be asked
to contact one of the Independent Mortgage Advisors on the
Lea Valley Homes panel to assess affordability.
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What are the Charges/Interest
on the government equity loan? |
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There is no ongoing charge or interest on the loan, and you
will share in any uplift in property value with Government when
you pay the loan back. |
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Can deposits be used? |
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The loan can be used in conjunction with any other deposit
you may have. There are no restrictions on the use of deposits.
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How is the loan repaid? |
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The loan must be repaid when the property is sold, but can
also be paid back earlier, as and when you can afford to do
so. The amount which is repaid is calculated as 17.5% of the
property’s market value at the time of repayment (or more or less
if you take out a larger or smaller equity loan). |
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Who is eligible to apply? |
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- Only applicants registered before 1st April 2008
- Existing tenants of local councils and housing associations
- Those registered on local housing registers
- Key Public Sector employees
- Some other priority first time buyers’ e.g. local
authority employed support workers, state funded teaching
assistants & learning support assistants, NHS employed
medical secretaries and medical receptionists - all working
in Hertfordshire.
- Other First Time Buyers who cannot afford to purchase
without assistance
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How does OMHB(glo) work? |
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Purchasers will need to raise a mortgage or mortgage and deposit
and the government will
offer an average equity loan of 17.5% up to £50,000. Purchasers
must maximise their mortgage and if you can afford to purchase
a suitable property without assistance you will not receive
assistance.
The government equity loan is a second charge against your
property.
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How much will I get if I purchase
through the OMHB(glo)? |
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Each application will be assessed individually. How much financial
assistance you receive will be dependant on your household income,
savings, financial commitments, equity from property you may
already own, the purchase price of the property you are buying,
and the mortgage you can obtain. |
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How much will it cost to buy
through the Low Cost Home Ownership scheme? |
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Buying a property is expensive and applicants in the Hertfordshire
area will have to have access to approximately £3,500
(more if you are a current home-owner) to cover the ‘one-off’
legal fees, stamp duty, mortgage arrangement fees, survey, moving
costs etc. These costs should be funded through your own savings
or from help via family/friends etc. without the need to take
out a personal loan or borrow the money on your mortgage. We
recommend you seek advice from an independent mortgage advisor
to see if home ownership is a realistic option for you. |
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How do you work out my mortgage
ability? |
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The guideline for HomeBuy Agents is 3 to 3.5 times joint or
3.5 to 4 times single income multiples to determine your mortgage
potential. However, in certain circumstances (e.g. no or low
current debts) they may be flexible with these multiples assuming
that home ownership is sustainable in the longer term. |
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How much of my current savings
will I be allowed to keep? |
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You may keep up to £10,000 which includes the minimum
£3,500 you will need for the cost of buying. |
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What kind of property can I
purchase? |
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Most homes may be considered but if in doubt, check with
Lea Valley Homes
- Traditional construction
- You may purchase a property with one bedroom more than
you needif it is an affordable and sustainable option
- Leasehold homes with a minimum of 55 years left on the
lease
- If the property you currently rent is being offered for
sale, you may purchase it providing the survey verifies
the valuation.
- Properties under construction and being marketed by the
developer may be purchased if:
- the sale price is fixed
- exchange on contracts takes place within 6 months
of ‘Invitation to Search’
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Are there any types of properties
we are not allowed to purchase? |
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Yes there are a number of properties that you would not be
able to buy
- Mobile homes of any sort e.g. houseboats, caravans etc
- Properties bought at auctions
- Properties that need more than £5,000 spent on
defects to bring them up to standard
- Commercial properties
- Leasehold properties with less than 55 years left on
the lease.
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Can I make alterations / adaptations
to my property? |
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You must have the HomeBuy Agent’s permission in writing
before you make any alterations to your property. However, the
HomeBuy Agent cannot withhold permission unreasonably. |
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Can I buy my home outright in
the future? |
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You may purchase your home outright (called stair-casing)
at any time you are in a financial position to do so. The governments
equity loan needs to be paid off in one go. |
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Can I remortgage? |
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Purchasers are free to re-mortgage with a different qualified
lender, but will need the HomeBuy Agent's consent if the equity
loan is still in place. |
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What if I want to sell my home
in the future? |
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When you want to sell your property, the HomeBuy Agent will
arrange a valuation for you – but you will have to pay
the fee. When your property is sold, it is the valuation, not
the sale price which is used to calculate how much you will
need to repay. If the sale price is higher than the valuation,
then you will keep the difference. However, if it is lower,
you will need to pay the difference to the government (via the
HomeBuy Agent). |
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Is there portability? |
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The rules are
different depending on which scheme you purchased through. Please
check with Lea Valley Homes.
(If you move within 5 years and stay with the same Mortgage
Lender, ‘early repayment charges’ may be refunded.) |
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REMEMBER! YOUR HOME
MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE
OR ANY OTHER DEBT SECURED ON IT. |
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