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HOMEBUY DIRECT IN BRIEF
With the Government-led HomeBuy Direct initiative you can buy a new Broadgate Home with the assistance of two equity loans. One loan is from the Homes and Communities Agency (HCA) and one is from Broadgate Homes.
You take out an affordable mortgage (minimum 70% of the purchase price) on which you make repayments in the normal way. The rest of the purchase price will be met by two equal equity loans from Broadgate Homes and the HCA.
For the first 5 years you pay no interest on the equity loans from Broadgate Homes and the HCA.
After 5 years you pay interest on the two equity loans of 1.75% per annum - this fee increases each year by RPI plus 1%.
When you sell your HomeBuy Direct home the equity loans are repaid from a share of the sale proceeds. So if your initial loan totalled 30% of the purchase price, your repayment will be 30% of the total sale value achieved.
After 12 months of ownership of your new home you can choose to make part or full repayment of the equity loans at the market value at that time. The minimum repayment is 10% of the total market value.
If the value of the property has increased by this time the buyer, Broadgate Homes and the HCA will all benefit from a share in this increase. If the value of the property has gone down, Broadgate and the HCA will only share the sale proceeds that are left over once the mortgage has been repaid.
Broadgate and the HCA’s entitlement to a share of the future sale proceeds are secured through equal second and third charges on your home. This is done in the same way as your mortgage lender secures its lending.
Although you may pay as little as 70% of the value of your new home you will be the legal owner with 100% ownership.
Local HomeBuy Agents (a housing association appointed by the government) will assess and approve your eligibility for HomeBuy Direct and you need to be confirmed as eligible before you proceed with the buying process. This scheme is only available to approved purchasers.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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