If you are a first-time buyer who cant afford to buy a home without help, find out about the HomeBuy Direct scheme. You could get an equity loan for up to 30 per cent of the cost of a home.
HomeBuy Direct – who can apply?
The HomeBuy Direct scheme covers certain properties in every region of England. Before you can get a home through the scheme, you need be sure that you meet the eligibility criteria.
The scheme is provided through HomeBuy agents, who can help you through the application process for a home. HomeBuy agents are appointed housing associations – non-profit organisations that manage housing for people having difficulty buying a home.
HomeBuy Direct is open to households earning less than 60,000 a year who would otherwise be unable to buy a home.
You may be eligible if you are either a:
first time buyer
previous home owner who can’t now afford to buy without help (perhaps because you have broken up with your partner)
housing association or council tenant
key worker (a key public sector worker, like a nurse or teacher)
Follow the link below to find outwhether you qualify as a key worker.
How to apply
If you think you are eligible for help to buy a home through the HomeBuy Direct scheme, contact your local HomeBuy agent. If you are a key worker, you should contact the HomeBuy agent for the area where you work.
You can find your local HomeBuy agent by following the link below.
How does HomeBuy Direct work?
Your local HomeBuy agent will assess your eligibility for the scheme and then look at the options available in your area. There are certain newly built properties that you can get help to buy through the HomeBuy Direct scheme.
Youll need to be able to cover at least 70 per cent of the cost of the property. This will need to be done through a mortgage from a qualified lender regulated by the Financial Services Authority and any savings.
In most cases you’ll still need some money to cover the costs of buying a house, like Stamp Duty, legal fees and any deposit.
If you are eligible:
you could get an equity loan of between 15 and 30 per cent on the cost of a newly built property
youll need to repay the equity loan when you sell the property
you can choose to repay some or all of the loan sooner by buying additional equity shares in the property (at the market rate)
The HomeBuy Direct scheme will be fully open soon. If you are interested in buying a property through the scheme, contact your local HomeBuy agent for advice.
What is an equity loan?
Equity loan providers share in any rise (or fall) in the value of the property over the course of the loan. By repaying all or part of the loan sooner, you can reduce the amount your provider is entitled to receive when your home is sold. Equity loans for the HomeBuy Direct scheme will be provided by public funding and the house builders who are participating in the scheme.
Will you have to pay any fees or charges on the equity loan?
During the first five years of the loan, you wont be charged a fee. After this there will be a small monthly charge.
Can you sell your HomeBuy Direct property?
Yes, you can. When you sell your home, youll need to repay your mortgage and equity loan with the money you get from the sale.
If your house has increased in value, youll have to share the profit between yourself and the equity loan providers. If you received a 25 per cent equity loan to buy the property, your equity provider gets 25 per cent of the money when you sell it.
If the value of your home has gone down when you sell, youll need to repay your mortgage first. Then, youll need to repay the equity loan from what is left over.
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