Open Market Homebuy

These two equity loan schemes are designed to help those who are not able to afford to buy a suitable home on the open market in an area where they live or work. The amount of funding offered will be based on housing requirement and income. These schemes can be used to purchase a house anywhere in England.

Own Home

An equity loan of 20-40% is provided by Places for People. The remainder of the mortgage must be taken with the Co-operative Bank. No rent is payable on the equity loan, nor does it accrue any interest in the first 5 years. In years 6-10 interest on the equity loan is paid at 1.75%, increasing to a fixed rate of 3.75% in year 11.

The loan extends for 25 years. If the property is sold within this time, the full loan must be paid back at the current market value. Further shares in the property can be bought at any time to reduce the equity loan. There are no early redemption charges.

Contact 0845 607 0110 for an application pack, or visit Own Home.

MyChoice Homebuy

An equity loan of 15-50% is provided by Chase Group. The remainder of the mortgage can be taken with any lender who will offer a shared equity mortgage. No rent is payable on the equity loan, but interest is payable from day 1 at 1.75% for the first year, and at the Retail Price Index +1% thereafter. After the first year applicants can buy all or part of the equity over a period of time, to eventually own the property outright.

Contact your Homezone agent on 0845 658 4420 or visit http://www.mho.co.uk/ for more information

Criteria:

• The applicant must be registered with Home Point Herefordshire.
• The applicant must have the ability to finance a share in the property, either through a mortgage and/or through a lump sum.
• The applicant must be unable to afford to purchase the property outright without assistance.

Conditions:

• Maximum purchase price limits apply, dependent on the size of the property to be purchased.
• The applicant will be advised of the relevant price limits at the time of acceptance.

Other Information:

• The applicant has the option to purchase further shares in the property from the RSL in the future. The shares must be purchased at the market value at that time.
• Permitted to purchase property size needed, plus one additional bedroom space.
• On completion of the scheme, the applicant is still considered an owner-occupier in terms of maintenance and management of the property. However, major works to the property will require written consent from the RSL.
• On death of the shared owner, the property can either be passed on by way of an inheritance, or sold (details of sale conditions explained below).

Sale of LCHO property purchased under Open Market Homebuy:

• The RSL must be notified of the intention to sell.
• They will then advertise the property through Home Point Herefordshire.
• If the are unsuccessful in finding a buyer for the shares, the property can then be advertised on the open market through an estate agent.
• Alternatively, RSL shares can be purchased at market value and the property sold as whole.

Last Updated: 17 October 08,
Review Date: 20 September 2005