Open Market HomeBuy
Who qualifies?
People unable to buy a home without help and who are:
- a social housing tenant or
- on a housing waiting list or
- in need of a home because of a relationship breakdown or a house clearing project
or
- a key worker. For example you may be a nurse, police officer or work for a council
(see the list at the bottom of this page for KW's)or
- a first time buyer working in the area who is contributing to the economy. For
example you may be an office, shop or factory worker.
There are two open market HomeBuy options available:
Option One MYCHOICE HOMEBUY
MyChoiceHomeBuy is a great opportunity to help you buy a home of your CHOICE
on the open market.
What is MyChoiceHomebuy?
MyChoiceHomeBuy is the name of a shared equity scheme that aims to help people
who cannot afford to buy a home of their own.
With MyChoiceHomeBuy the choice is yours. YOU choose a property on the open market
and YOU choose a mortgage from an approved lender that best meets your needs.
Who is offering MyChoiceHomeBuy?
MyChoiceHomeBuy has been developed by 8 housing providers in partnership with
the government and the Housing Corporation; it is being marketed via a national
network of 23 HomeBuy Agents. Metropolitan Home Ownership (MHO) is one of the
8 housing providers who have developed MyChoiceHomebuy and are working in partnership
with HomeBuy Agents across the country to deliver the product.
MHO are part of Metropolitan Housing Partnership . They are a charitable business,
part of a non-profit making Registered Social Landlord (often referred to as an
RSL or a housing association).
How much will I receive?
This will depend upon your household's income, savings, any property you already
own, any financial commitments such as student loans, the mortgage you can get,
and the purchase price of the property you are buying. The maximum loan is up
to £100,000.
How does it work?
MyChoiceHomeBuy is simple and uncomplicated, offering a single equity share to
top up your mortgage and help you afford a home of your own.
· Once invited to find a home you choose a home on the open market
· You can receive as much as a 50% equity share, or as little as a 15%
equity share to help you buy the home of your choice subject to what you can afford
and your housing need
· You will pay a monthly fee of 1.75% on the share bought with MyChoiceHomeBuy.
What level of fees will be charged for MyChoiceHomebuy?
You will pay 1.75% on the share bought with MyChoiceHomeBuy. This will increase
by up to RPI plus 1% annually.
What do I do next if I am interested and want to know more?
Register an interest with MHO and fill in the my4walls application form (go to 'apply
online' at the top of this page).
You must then fill in the my4walls application form and tick the MyChoiceHomebuy
option. We will headline check your form for eligibility and refer your details
onto MHO. MHO will then contact you and invite you for a local independent financial
assessment to find out how it all works.
What happens at the independent financial interview?
At the financial interview you will be told how it all works, what the costs
are and will be given an indication of how much assistance you can get before
you find a home of your choice.
MHO will then write to you formally to advise you the outcome of the interview
and if you will get financial assistance.
You cannot find a home until you are formally invited to find a property by Metropolitan
Home Ownership.
What lenders can I go to get a mortgage?
Unlike some other equity products, you will not be tied to use just one lender
to get your mortgage. We believe the customer should have choice so you can use
any approved high street lenders.
The Independent Financial Adviser will talk you through this in detail and give
you detailed financial breakdowns known as Key Financial Information (KFIs).
General FAQs
Can I use the cash from my council to buy a home through MyChoiceHomeBuy
No - assistance through MyChoiceHomeBuy cannot be combined with any other publicly
funded home ownership scheme.
What happens if the house I want to buy costs more than the valuation price?
Will I still get financial help?
In this instance, MyChoiceHomeBuy funds can only be used where funding is calculated
on the lower of the price and value of the home. The cash shortfall between value
and the price will need to be met by the purchaser without resorting to further
secured borrowing over and above the mortgage.
Is this offer exclusive to key workers?
No. Key workers qualify but priority is given to all first time buyers who are
working in their local area. We also help council and housing association tenants
and those needing help because they are going through divorce or seperation.
Who provides the funding for MyChoiceHomeBuy?
This is provided by Metropolitan Home Ownership and the Housing Corporation (a
government body).
What are the monthly costs of this product?
Every month, you will need to make the following payments:
1. Your mortgage repayment, which you make to the lender.
2. Your fee which you pay to Metropolitan Home Ownership
If I buy a share now, can I buy more of my home later?
This is called staircasing. You should check with your MyChoiceHomeBuy provider
as to the specific rules of your scheme.
In general after you have lived in your home for three months you can buy an
increased share or buy it outright. The price of the increased share will be based
on the value of your home at the time you want to staircase – whether that is
more or less than when you originally bought.
What happens when you want to sell?
You can sell your share of the property at any time and an independent survey
will decide what your property is worth. The property will be sold at the current
market valuation.
Who pays the Council Tax on the home I may buy?
It is your responsibility to pay Council Tax.
Who pays for repairs and ongoing maintenance in a new home I may buy?
It is your responsibility to repair and maintain your new home. New Homes often
come with a guarantee that will cover defects in your home for the first year
after it was built. This guarantee usually only covers defects in the builder’s
workmanship.
Useful Links
MHO site: www.mho.co.uk
Option Two OWNHOME HOMEBUY
Ownhome is a new HomeBuy product available for use on the open market. It will
be marketed directly to you as well as through HomeBuy agents. There will be no
interest to pay on the ownhome loan for the first 5 years, and no additional premium
fee's or charges.
No deposit is required although you can pay one if you are able.
What is Ownhome HomeBuy?
Ownhome is offered by Places for People ( a housing association) and Co-Op Bank.
You can call OwnHome directly on:
0845 607 0110
How does it work?
- You choose a property on the open market and Ownhome arranges funding for 100%
of the value of that property.
- Up to 40% of this comes from an Ownhome equity loan from Places for People thats
interest free for the first 5 years.
- You have a choice from the full range of mortgages from The Co-Op Bank to cover
the remaining cost.
- After 5 years you are charged a fixed rate of 1.75% interest p.a. on the Ownhome
loan. After a further 5 years this will increase to a fixed rate of 3.75% interest
p.a.
Ownhome – how the cost is divided
40% Ownhome loan from Places for People
Places for People could lend you between 20% and 40% of the value (equity) of
the home you wish to buy for 25 years (or the term of your mortgage if shorter)
You will not have to make any interest payments on the Ownhome loan for the first
five years.
After five years you will be charged a fixed interest rate of 1.75% interest
on the Ownhome loan each year.
After a further five years interest will be increased to a fixed rate of 3.75%
for the rest of the loan period.
This is interest only and no capital is repaid through these monthly payments
to reduce the size of your borrowing
The Ownhome loan is an equity loan - which means it is based on a percentage
of the value of the property.
After 25 years (or the term of the mortgage if sooner) you will have to repay
the loan, calculated on the value of the property at the time of repayment.
You can pay back the Ownhome loan whenever you are able; there is no early redemption
or payback charge.
The Ownhome loan will be offered to people who pass the eligibility criteria
outlined overleaf, and are able to get a mortgage from The Co-operative Bank.
Funds are restricted, and Ownhome loans are subject to availability.
60% mortgage from The Co-operative Bank
Once you have qualified for an Ownhome loan with Places for People, you can apply
for a mortgage from The Co-operative Bank to cover the rest of the cost of your
new home.
You can choose from a range of simple and flexible mortgages available from The
Co-operative Bank. There will be no additional premium, fees or charges for being
an Ownhome customer.
Options include a fixed, discount or tracker mortgage that best suits your circumstances,
on a repayment basis for up to 25 years.
All mortgages are subject to status and affordability.
You do not need a deposit, but can pay one if you are able to.
FAQS on eligible properties
What type of property can I buy?
You have to buy a property suitable for your household's needs and within a reasonable
travelling distance of your work place.
You may buy any property provided it meets the following conditions. However,
your lender has the right to make sure that the property you choose would provide
enough security for the mortgage they are making available to you.
· The property is acceptable for mortgage purposes
· It is in England and is on sale on the open market with vacant possession
(that is, no-one is currently living there)
· It is a residential property and has no commercial use
· It is immediately fit to live in.
· Second-hand homes must be supported by a survey report, such as a homebuyer’s
survey and valuation report. You do not need to provide a full structural or buildings
survey.
· Second-hand homes offered on a leasehold basis (mainly flats) must
offer a term of at least 55 years (80 years if applying through Metropolitan Home
Ownership).
· New properties being built and being marketed by developers may be
considered for the scheme if the sale price is fixed and the contracts can be
exchanged within six months of the HomeBuy agent saying that you can look for
a home (this must be in writing).
· If you are a key worker, you must also make sure that the home you
want to buy is within a reasonable traveling time from your place of work. As
a general rule, we consider a journey of up to 90 minutes to be reasonable.
Are there any properties that I cannot buy?
The following properties do not qualify for the scheme.
· Properties on sale at auction
· Caravans and houseboats and other mobile homes
· Properties offered to you at discount or under shared-ownership conditions
by a housing association, local council or other public organisation
· Property that is part of a self-build scheme or proposal
· Properties which already have tenants
· Properties in poor condition (MHO/Places for People will make the decision
based on the survey report you get). If your mortgage lender holds back £5,000
or more from the mortgage because the home needs work doing to it, the property
will automatically be classed as being in poor condition.
· Homes owned by a member of staff working for MHO/Places for People.
What size of home can I buy?
The size of the home you buy is based on the number of people that are going
to live with you. You will usually be able to buy a home with one bedroom more
than you need. For example, if you are single or a couple with no children, you
can buy a two-bedroom home. If you are a couple or single parent (with at least
part custody) with at least one child, you will be entitled to a three-bedroom
house.
Should I buy a new or old home?
The choice is yours but most people are likely to buy older homes . The home
that you want to buy must be in good condition. If it needs more than £5000 of
‘serious repairs’, or your mortgage lender holds back a retention of £5,000 or
more, we won’t accept it. By ‘serious repairs’ we mean structural problems or
any repairs that would prevent you from living in the property immediately. Cosmetic
work, such as redecorating, or replacing an old-fashioned kitchen, is not considered
to be a serious repair.
If you are buying a second-hand property you must arrange a detailed survey.
This is usually organised by your mortgage provider and is known as a homebuyer’s
report. You must send a copy of this report to us. If the report highlights some
serious faults, we may ask you to get some quotes for work to sort out the problems.
If these quotes are more than £5000 we will not allow you to buy that property
using the scheme. As a result it makes sense to have a good look at lots of homes
in the areas you want to live in. We will give you a property checklist to help
you.
If you buy a brand-new home, it must have an NHBC (or similar) warranty.
Can I buy a house or a flat?
You can buy either a flat or a house.
If you buy a flat you will usually become a ‘leaseholder’. Any lease should have
at least 80 years to run; otherwise you will not be able to buy the property The
owner of the block or converted house will be the ‘freeholder’ and you will usually
be responsible for paying ‘ground rent’ and a ‘service charge’ which covers the
costs of maintaining and insuring the building only. You will still be responsible
for maintaining and insuring the inside of the property and its contents.
Can I buy the property that I currently rent or a property owned
by a family member?
You can buy the property that you rent or a property owned by a family member
as long as the value of the property has been approved by a RICS-qualified surveyor.
If you are a council or housing association tenant, you cannot use the scheme
to buy your existing rented home.
Key workers who may currently get help include:
Clinical NHS staff (with the exception of doctors and dentists);
Teachers and nursery nurses in schools and further education/sixth form colleges;
Police officers, Community Support Officers and some civilian staff;
Prison Service staff in certain prisons
Firefighters and other uniformed staff below principal level in Fire and Rescue
Services.
Regular armed service personnel (i.e. regular service personnel, including Military
Provost Guard Service, in the Navy, Army and Air Force);MoD Police Officers; and
Uniformed staff in the
Defence Fire Service
Probation Service staff;
Social workers, nursery nurses, educational psychologists, and therapists (e.g.
occupational therapists) employed by local authorities, CAFCASS or the NHS;
Local Authority Planners
Connexions Personal Advisors employed by a local authority or a Connexions Partnership.
Qualified Environmental Health Officers/Practitioners who work in a local authority,
government agency, NHS or other public sector agencies
Highways Agency Traffic Officer staff in safety critical roles within the Traffic
Officer Service
