Today is

By: Ikedi Ani-okoye

Open Market HomeBuy

Open Market HomeBuy is a government-backed product that aims to help certain groups of people who cannot aford to buy a home on the open market without assistance. The scheme provides access to additional money called equity loan(s). which run alongside a conventional mortgage loan.

Home buying products

The products available under Open Market HomeBuy allow borrowers to buy a home on the open market with the help of an equity loan. The scheme is for key workers, social tenants, those on the housing register and other priority first time buyers. The main theme of the initiative is to extend the current Government HomeBuy scheme for key workers by substituting half of the Government's current 25% equity loan with private finance from a lender such as Nationwide. This means that lenders offer an equity loan of 12.5%, which is interest free for the first five years.

Accessing home buying

It is anticipated that accessing a home via the scheme will typically be around 20%~ cheaper than buying a home unassisted, meaning that households currently priced out of the housing market are able to take their first step on the housing ladder. For example. on a combined household income of £32,000, a couple could expect to be offered a mortgage of £136,000, which is unlikely to get them anything suitable in many parts of the South East. With the assistance of the HomeBuy scheme, however, their purchasing power could be boosted to £180,000

CONCLUSION

Potential honneowners can find out about the scheme by contacting their local HomeBuy Agent, employed by the local housing association (details can be found on the Department for Communities and Local Government website www.communities.gov.uk) A HomeBuy Agent will give the customer details oi the mortgages available under the scheme and assess their eligibility. lf applicants are eligible the agent will provide them with a confirmation letter. This will then be one of the proofs that the applicant needs to give to the lender

The Governrnent is keen for the scheme to be extended as much as possible with more lenders offering products through Open Market HomeBuy. More lenders getting involved will be good news for homeowners as there will be more customer choice.