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Open Market HomeBuy Update
November 07
A new version of Open Market HomeBuy (OMHB) has been announced - the ‘Government Loan Only’ product, which was launched in the wake of the recent Housing green paper ‘Homes for the future: more affordable, more sustainable’, can now offer up to 25% of extra purchasing power to HomeBuyers to bridge the gap between income affordability and property prices.
New income multiples of 4 x single income and 3.5 joint income will be considered for all Open Market HomeBuyers (subject to IFA assessed affordability).
Below is an example of how the Government Loan Only (GLO) version compares to the extended OMHB option.
OMHB GLO scheme (‘Option A’)
- Mortgage & Savings must add up to a minimum of 75% and a maximum of 82.5%
- Maximum Government loan is up to 25%
- Any lender can be used – no adverse credit lenders
- Salary multiples can go up to 4x for single and 3.5x for joint, approval forms need to be signed off
- Can get the most competitive mortgage from a high street lender
- No hidden interest costs after a 5 year period
OMHB Scheme (Option B’)
- No limit on the government grant, this can go above £50,000
- Only one of the 4 lenders
- Mortgage and Savings must add up to 75%
- Maximum loan is only 25% (12.5% lenders loan and 12.5% Gov loan)
- Salary multiples can go up to 4x for single and 3.5x for joint, approval forms need to be signed off
- Strict mortgage deals, and not very competitive interest rates
- After 5 years Lenders Equity Loans will be charging interest
- See also: