■ With Open Market HomeBuy, you get an equity loan from a mortgage lender and a HomeBuy Agent, as well as a standard mortgage loan.
■ You pay interest on the standard mortgage loan, and after five years on the lender’s equity loan too. You won’t ever pay interest on the HomeBuy Agent’s equity loan.
■ The amount you owe on the equity loans will increase if the value of your home increases. Over time, this could mean you owe much more than you originally borrowed. Think about how you would repay this.
■ Any money from the value of your home that you have to pay the mortgage lender and the HomeBuy Agent will mean you have less to put towards buying a new house if you want to move home.
■ Make sure you understand what you will owe if your home falls in value.
■ All the loans must be repaid before you get any money from the sale of your home.
■ If your home is worth less than the amount you owe, you usually won’t have to repay the HomeBuy Agent in full.
■ Whenever you repay one of the equity loans, you’ll have to pay for a valuation of your home.
Is this type of mortgage right for you?
■ There are many types of mortgage available and different ways to get onto the property ladder. Open Market HomeBuy gives you an extra option, but it’s important to consider all the choices available to you before you decide what’s right for you. Perhaps you could get a conventional mortgage by choosing a cheaper property, buying with a friend or building up a deposit. There are also other government housing schemes that your HomeBuy Agent can tell you about.
■ If you do decide to use the Open Market HomeBuy scheme, you’ll also have to decide which mortgage lender to borrow from. The about this mortgage document will help you compare different mortgages and choose the one that is best for you.
■ If you are unsure about all the different options available, consider getting some independent
financial advice. Your HomeBuy Agent may be able to give you details of a specialist adviser.
What is right for you will depend on your needs and circumstances. Before making a decision about an Open Market HomeBuy mortgage, you should make sure you have considered all the options open to you.
Useful FSA publications
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Available from FSA website:
www.fsa.gov.uk/consumer or on our Leafletline on: 0845 456 1555
■ Choosing a mortgage – taking the right steps
■ You can afford your mortgage now but what if...?
Work out what you can afford using our online mortgage calculator:
FSA mortgage calculator:
www.fsa.gov.uk/consumer
Other information
More information about the Open Market HomeBuy scheme, including eligibility and the application process can be found in the Housing Corporation leaflet, Have you heard about Open
Market HomeBuy? This is available from the Housing Corporation’s website at www.housingcorp.gov.uk
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