HomeBuy Direct

January 31, 2011

No Deposit Required with HomeBuy Direct

First-time buyers continue to face barriers in the path to owning a home as the property market remains subdued. A lack of affordable housing is one issue, and lenders requiring a deposit of at least 10% is also a challenge to many aspiring homeowners.

HomeBuy Direct is a new initiative aiming to combat this by providing an equity loan on new build properties in England. The scheme is designed to make more affordable homes available to first-time buyers and to boost the housing market by encouraging more transactions.

Who is eligible?

Eligibility is based on a household income of £60,000 or less and applicants will also be subject to an affordability check to assess the size of equity share they are able to afford and sustain. Once qualified, applicants will be invited to choose a HomeBuy Direct property, for which they will receive an equity loan of up to 30% of the purchase price, co-funded by Government and the developer. The remainder of the purchase price needs to be funded by a mortgage and any available deposit.

Help for teachers

If you are a teacher and would like to know more about the scheme, you can call Teachers Building Society on 0800 378 669 or use the online contact form. We support Homebuy Direct by welcoming mortgage applications for up to 70% of the purchase price, meaning that teachers receiving an equity loan of 30% from the scheme would not need any deposit to proceed with the purchase. We have a competitive 3 year fixed rate mortgage product available for the scheme. To find out more about this product please click here for full details.

Our experienced and friendly team of mortgage consultants is ready to discuss your circumstances and assess affordability, and can point you in the direction of your regional Homebuy Agent so that you can find out more about the specific properties available in your area. We treat our customers as individuals, assess each case on its own merits and have a long history of dealing with such government schemes.

What about selling?

If you purchase a property via the Homebuy Direct scheme and later need to sell it to relocate or upsize, the home can be sold on the open market. Upon completion, the equity loan would be repaid by way of a share of the proceeds. If the value of the property has increased by the time of sale, the buyer, developer and Government will all share in this increase. If the value of the property has gone down, the Government and developer will only share the sale proceeds left over once the mortgage has been repaid.

For more information, call the mortgage consultancy team at Teachers Building Society on 0800 378 669 or visit the DirectGov website here.