HomeBuy Direct schemes are no longer readily available through the government, as the Help to Buy Equity Loan is very similar and more up to date.
The HomeBuy Direct scheme offers equity loans towards the purchase of a new build property on selected developments.
How it works
The client buys at least 70 percent of the market value of the chosen property. The equity loan, which is anything up to 30 percent, gives the owner added assistance in the purchase of the home. In this scheme there are no payments of the loan for the first five years.
After the initial five year period there is a monthly interest of 1.75 percent which again increases annually in line with inflation, a mortgage will usually need to be taken out and used in conjunction with savings to initially pay for the deposit of the property.
Options after buying through HomeBuy Direct
There is the option to purchase additional shares of the property until the client owns 100 percent of the home; the price of the shares are calculated based on the market value of the property at the time of purchase.
If the property is to be sold, the equity loan is redeemed as a proportion of the market value of the property at the time of sale.