HomeBuy Direct Scheme
HomeBuy Direct Scheme
HomeBuy Direct Scheme - Fees
Your HomeBuy direct fees may consist of all or some of the following:
- Council Tax
- Mortgage repayments to be made to lenders
- Fees on HomeBuy Direct Equity Loan (due after 5 years)
- Service Charges in case you purchase a property that requires regular maintenance
- Buildings Insurance and Life insurance
- Cost of occupying the property
- Utility bills
- Cost of communication (post, mail, stamps etc.)
Note that these payments will be made on monthly bases, in addition to your usual monthly outgoings
To understand the HomeBuy Direct Fee structure, please consider the following illustration:
Start of year |
Estimated annual change in property price % |
Total property value (£) |
HomeBuy Direct home owner your entitlement to 70% of property value (£) |
Agency & housebuilder entitlement to 30% of property value (£) |
1 |
2 |
200,000 |
140,000 |
60,000 |
2 |
2 |
204,000 |
142,800 |
61,200 |
3 |
2 |
208,080 |
145,656 |
62,424 |
4 |
2 |
212,242 |
148,569 |
63,672 |
5 |
2 |
216,846 |
151,541 |
64,946 |
6 |
2 |
220,816 |
154,571 |
66,245 |
Note that in this particular case, if you choose to sell your HomeBuy direct property at the beginning of year 6 (assuming that the property value appreciated by 2% per annum) you would automatically become liable to pay £66,245 for the HomeBuy Direct Equity Loan and use the remaining amount of £154,571 to payback any outstanding amounts on your mortgage to your lender.
Also, bear in mind that HomeBuy Direct provides you with an option to repay the Equity Loan in instalments instead of paying it all in full at once. This is known as “Staircasing” and you are required to start repaying after one year of owning the property.
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