What is Open Market HomeBuy and how does it work?
Open Market HomeBuy is a government-backed scheme – the aim is to help certain groups of people who cannot afford 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.
There are two Open Market HomeBuy products available.
- Expanded Open Market HomeBuy (EOMHB), which started on 2 October 2006
- Open Market HomeBuy (Government loan only) (OMHB - GLO), which started on 23 July 2007
The SH Group has provided a publication on Open Market HomeBuy (PDF)
Breaking News
- Property prices in Oxford are almost TWELVE times average annual salaries in Oxfordshire!
- Will the new Government Equity loans make a huge difference?
- HomeBuy brings affordable housing to Staffordshire
Expanded Open Market HomeBuy
Two equity loans – each worth around 12.5% of the value of your home –
- the first is provided by the same participating lender you selected to provide your conventional mortgage loan
- the second is provided by the Government and administered by a HomeBuy Agent (a housing association in England that has been appointed to operate the product)
Open Market HomeBuy (Government Loan Only)
One equity loan - worth up to a maximum of 17.5% of the value of your home or £50,000 - which ever is lower - is provided.
This loan is provided by the Government and administered by a HomeBuy Agent (a housing association in England that has been appointed to operate the product.)
For both products there is no charge, interest or monthly payments to be paid by you on the equity loan provided by the HomeBuy Agent.
For the EOMHB product there is no charge or interest levied on the loan by the participating lender for the first five years
However, when repaying the equity loans, the homeowner will have to share any increase in the property’s value with the lender (for EOMHB) and the HomeBuy Agents.
The effect is similar to a loan under which you pay credit charges at the rate at which your home has increased in value. As an illustration, if your home increases in value by 4% or 8% a year, the sum you will repay will be equivalent to borrowing under a loan with an APR of 4% or an APR of 8%. The amount repayable would include a redemption fee, where that is charged (EOMHB).
Is this a joke?Well Open Market has had a mixed past and many complain of over complication within the system for we compiled a brief history of the scheme its past present and future.
Who can apply?
- Existing council tenants
- Existing housing association tenants
- People on council housing waiting lists
- Key workers
- Some other priority first time buyers
Please contact a HomeBuy Agent to confirm your eligibility to take part in the scheme.
How do I apply?
Contact your HomeBuy Agent.
The HomeBuy Agent will have a panel of Independent Financial Advisers such as CTAB Mortgage Desk - their website can be found at www.sharedownershipmortgages.org.uk