How FirstBuy Works
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT FINANCIAL ADVICE.
Eligible applicants will be offered an equity loan of up to 20% of the purchase price. The registered provider and the HCA will hold equal second charges on the property. Applicants are required to fund the balance of the purchase price by deposit and mortgage. Applicants are required to obtain their mortgage from a Qualified Lending Institution. The Equity Loan is repayable upon sale based on the relevant percentage of the sale value. In any event it must be repaid by the 25th anniversary. There is no interest in the first 5 years. The interest rate in the sixth year is 1.75% per annum payable on the amount funded originally but reduced to reflect any partial repayment. The rate will increase each year thereafter by RPI +1% per annum and will never reduce. Interest is payable monthly.
Annual Percentage Rates (APR)
Because you have to pay interest on your FirstBuy Equity Loan after year 5 and you may have to pay more than the original contribution , the effect will be similar to a loan where you pay credit charges at a rate dependent on the growth in house prices combined with the percentage rates of interest payable. In an example, where the property is purchased for £200,000 with a 20% Equity Loan, if property prices increase by 5% per annum and it is sold after 6 years, for £268,019. Interest of £700 over 1 year would have been payable giving a total payable of £ 54,304 on an original loan of £40,000. This is equivalent to an APR 5.2% typical.
Full details will be supplied to you prior to entering into your loan.
Company names: Berkeley Homes (East Thames) Limited
Registered address: Berkeley House, 19 Portsmouth Road, Cobham, Surrey, KT11 1JG
