A2H GO
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Registered: 14th Sep 04
Location: Stoke
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quote:
Originally posted by deano87
I also wanted to know about this. And Shared Equity sounds like a right plan - I guess you can pay into the loan if you want over the 5 years too?!
Good post 
Not sure if you can contribute towards the loan over the 5 years or not but as its interest free you would be better putting the money in savings anyway and paying it off in one go. Although there's no rent, say the house was £100k with a 30% as the interest free loan from the builder. You would need to save £500 a month to pay that back after the 5 years. However the idea is that after the 5 years you will have paid some off your mortgage AND hopefully saved an additional deposit to then remortgage for the full value of the property. So in effect after 5 years you still own the full property but just in 2 stages and for the 5 years you get a decent interest rate.
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A2H GO
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Registered: 14th Sep 04
Location: Stoke
User status: Offline
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quote:
Originally posted by AndyKent
Oops, my mistake. Still, in a regular market, the price should go up.
Imagine in an expensive area it could end up you can't afford to buy out the rest 
Yep you would definately need something in place for if the mortgage company won't lend you the extra money after the 5 years because you've missed a couple of payments or because the house price has gone up and the LTV is too high. In which case you could have mortgaged the full property to begin with.
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A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
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quote:
Originally posted by Rob_Quads
quote:
Originally posted by A2H GO
he only downside is if the property goes up in value, the loan costs you more to pay back.
ie. If the loan covers 25% of a £100k property. After 5 years the propertys worth £110k, the loan costs you an extra £2.5k to pay back. Then again it could go down in price.
[Edited on 15-11-2010 by A2H GO]
Ah I see. Yeah so its swings and roundabout then. Would be a spreadsheet and a half to work out the break evens if prices went up etc. Extra Interest Paymented on mortgage vs Extra payment required to buy house after X year.
And because noone can really predict house prices in 5 years it makes it virtually impossible.
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