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Financial Services > Mortgages > Home Ownership Plan > Who Might Home Ownership Plans Suit?

Who Might Home Ownership Plans Suit?

mortgagecase.com presents several examples of borrowers who used a Home Ownership Plan to purchase a property.

The vast majority of HOPs borrowers are first-time buyers. HOPs often allow borrowers to buy a property that they could otherwise not afford.

Read the mortgagecase.com guide to Home Ownership Plans >>

Read Home Ownership Plans Q+A >>

Example 1

Mr & Mrs Jones both held salaried position with an income of £26,597 and £3,000 p.a. respectively. They purchased a house costing £155,000. To do so, they borrowed £147,725 using a HOP.

This was broken down into a ROL of £54,425 and a mortgage of £93,300. Their borrowing extended to five times combined gross annual income. This is an example of how a HOP can be used to exceed traditional lending criteria of 3x income. Mr and Mrs. Jones could not have purchased their house without a HOP.

Example 2

Mrs Simpson, with a salary of £33,000 per annum, chose an annexe that cost £100,000. To purchase the one-bedroom place, she used a HOP with a borrowing of £90,500. This was divided into £75,500 mortgage and £15,000 ROL. This would result in lower mortgage repayments, but a share in the potential for capital gain on the property.

Example 3

Mr & Mrs Blake held incomes of £31,000 and £10,000 per annum. This coupled purchased a property worth £170,000 using a HOP. This consisted of a total borrowing of £161,500 - £56,525 loan and £104,975 mortgage. This borrowing stood at 3.9 times their gross annual income. The property in question was a three bedroom flat, and the couple plan to rent one room out to help with repayments. This is an example of a HOP being used to purchase a larger property than could otherwise be afforded. In the future, the Blake’s will be able to use the other room to accommodate their children.

Read the mortgagecase.com guide to Home Ownership Plans >>

Read the Home Ownership Plans Q+A >>

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