Big Dream Small Price - Move in with only 5% deposit
Loan 2 Own - Our shared equity scheme
If you are struggling to raise a deposit for the home of your dreams, then why not allow ISIS Waterside Regeneration to help? With a view to helping potential buyers take that first step on to the property market, ISIS have created their own Shared Equity scheme which makes it easier for you to purchase an apartment.
It is all about bridging the gap between the deposit you have (minimum 5%) and the deposit you need.
1. What is ISIS Shared Equity?
It is funded by ISIS to create an opportunity for people to live in high quality, affordable places. The scheme is specifically aimed at customers who are really keen to own their own home but who are struggling to raise a sufficient deposit to access reasonably priced, affordable mortgages as the ISIS shared equity scheme provides a large portion of the deposit.
Unlike some other shared ownership schemes if you purchase through ISIS you still have 100% title of your home and you can sell it on the open market – although you’d have to repay the ISIS loan in the event that you sold.
2. How does it work?
ISIS shared equity scheme enables eligible buyers to purchase a new property with an affordable mortgage.
ISIS will fund up to 20% of the purchase price to use towards the deposit. The amount of loan provided will be based on your individual situation and will be determined in your financial assessment.
Buyers must fund up to 80% of the purchase price through a combination of a regular mortgage and their own savings – a minimum 5% deposit from your own resources is required.
Once you have reserved a property, you will need to instruct a solicitor to act on your behalf. Once contracts have been issued, exchange takes place within 28 days, at which point a deposit of 5% (less the reservation fee £500) will be payable. When contracts have exchanged ISIS will let you agree a date for completion, when you are then free to move in.
The ISIS shared equity loan is repayable either when the property is sold, or in 10 years from completion.
However if you do any of the following then repayment to ISIS may be triggered and default charges may apply:
– you let your home without ISIS’s permission
– you breach the terms of the first mortgage on the property or the terms of the legal charge in favour of ISIS
– you die or are declared bankrupt, or enter into any accommodation or composition arrangement with your creditors
After 1 year you can begin to buy-out the ISIS equity share in up to 4 instalments of no less than 5% of the value each.
3. Who is eligible?
You are if:
– You are a first time buyer
– You are returning to the market. e.g. after a relationship breakdown
– You’re in full time employment
– You do not own another property in the UK and this is to be your principal residence.
4. What are the qualifying criteria?
You must have a financial qualification assessment from our designated Financial Advisor.
You must be able to demonstrate access to sufficient funds to pay, if required, a deposit, legal fees, stamp duty and other costs of moving.
You must also be able to prove you can keep up with your mortgage repayments in the long run.
You must have a good credit history and will be required to take out a first mortgage with a qualifying lender.
Typically, you will be employed on a permanent contract. If self-employed, you must be able to provide accounts for the past three years.
You must not already be a home owner or named on an existing mortgage. If you have had your name on a mortgage, you must provide evidence to show that is has been removed.
5. What type of home can I buy?
You can buy from a selection of apartments within the development up to a maximum list price of £200,000.
6. What happens if I sell my home?
When you sell your home, you will need to repay all remaining ISIS equity loans from a share of the sale proceeds. But the amount you have to repay to ISIS will vary depending on the value of your property at the time of repayment. How much you repay will depend on how much your home goes up or down in value during the term of the loan.
If the value of your home goes up you have to repay more; if it goes down you have to pay less. For example, if you received equity loans for 20% of the purchase price of your home, you must repay 20% of the proceeds of the sale.
We have set out below an example of how much you may have to repay:
Value of your home on purchase £175,00
------------------------------------------------------------------------------------------
Equity Share of ISIS 20% (£35,000)
------------------------------------------------------------------------------------------
Value of property on sale £200,000
------------------------------------------------------------------------------------------
Length of loan Amount repayable to ISIS on sale 10 years £40,000
------------------------------------------------------------------------------------------
OR
Value of your home on purchase £175,00
------------------------------------------------------------------------------------------
Equity Share of ISIS 20% (£35,000)
------------------------------------------------------------------------------------------
Value of property on sale £150,000
------------------------------------------------------------------------------------------
Length of loan Amount repayable to ISIS on sale 10 years £30,000
7. What happens if I want to sell my house but property values have fallen?
When you sell your house, the ISIS Shared Equity loan documents commit you to repay a percentage of the market value achieved which will be equal to the percentage contribution of assistance received at the beginning less any repayments you have already made.
If the market value of your property falls below the level at which is was bought, you will repay less than the remaining proportion of the original amount you have received towards the original purchase.
You will always be required to repay the Mortgage lender’s full outstanding balance.
8. What if I want to start repayments on my equity loan before the ten year period is up?
After you have owned the property for one year, you can choose to make part repayments of a proportion of the prevailing market value.
The minimum repayment is 5% of the market value at the time.
9. What is the difference between Shared Equity and Shared Ownership?
With Shared Equity:
– You own 100% of your home from the start
– There is no rent to pay on the equity loan share
– You can still buy back the equity-loan share in up to 4 instalments at a minimum of 5% of full value each time.
– There are no restrictions outside of the long-term lease of the property.
With Shared Ownership:
– You only own a share of the property
– You usually have to pay rent on the remaining equity share
– There can be restrictions on use and décor etc
10. How do I get started?
Contact the Granary Wharf sales team by calling 0113 243 4324.
Terms and Conditions
The Loan 2 Own Scheme has a limited availability and is only available on selected properties up to a maximum of £200,000. Loan 2 Own is not valid in conjunction with any other offer. At least 80% of the purchase price is supplied by the purchaser as part of their mortgage and a cash deposit of at least 5%. The loan from ISIS of up to 20% is registered as a second charge for up to 10 years and no interest or rent is payable on the loan to ISIS for this period providing that all the terms and conditions are adhered to and default charges may apply. The charge may have to be redeemed earlier on demand. The Loan 2 Own scheme is subject to status and ISIS Waterside Regeneration terms and conditions. The terms and conditions are available on request. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.