Remortgage with a Taylor Wimpey Equity Loan

AdrenalineJunkie

Morning All!

I was a first time buyer and bought myself a new build from Taylor Wimpey on a First Time Buyer Scheme. This scheme was a 5% deposit, 15% equity loan and 80% mortgage

The equity loan is 0% for 10yrs but will have to either be paid off on the 10yr mark or paid back if i sold the house

I am currently on a repayment mortgage with Halifax on a 2yr Fixed 5.7% which is due to finish and go down to the 3.99% variable at the end of June

I was wondering what my options were come end of June. As technically i would be looking for a c78% LTV mortgage but how will they view the equity loan?

If i see a product with Halifax that i could change to and lets say i do not get accepted is there anyway they can review and possibly decline my old mortgage that is still currently running?


Thank you in advance for any help

kingstreet

No. You have the right to remain on SVR with Halifax, or opt for one of its product transfer options if any are open to you.

You'll struggle to find remortgage options with the second charge in the way, but there might be the odd one if interest isn't payable from year 5, as it is with the state schemes.

A remortgage will see you needing a deed of postponement from the builder. Check if they will provide one, as without it, a remortgage won't happen.

AdrenalineJunkie

I've just seen that the scheme has changed since i took it out. They now offer a 5yr interest free but does not have to be paid back until the end of the mortgage term. Obviously i will now be double checking my equity contract to make sure i'm not on this! lol

The deed of postponement, is this simply a certificate to say they don't mind me moving my mortgage between companies?

Their doesnt seem to be many better deals for a 80% LTV than Halifax standard variab;e 3.99%

kingstreet

The deed of postponement prevents the second charge being promoted to a first charge when your current first mortgage is repaid.

If this was allowed to happen, your new mortgage lender would be left with a second charge and they will not accept this. The solicitor acting for them (and you, probably) will ensure the DoP is in place in advance of completion.

AdrenalineJunkie

So if i switch my £119k mortgage from Halifax to say First Direct i would need Halifax to give me a deed of postponement?

AdrenalineJunkie

Sorry i meant Taylor Wimpey would need to give me a deed of postponement...

kingstreet

It is the holder of the second charge which will provide the DoP. This can be the builder, or the Homebuy Agent if you used Homebuy Direct, or Firstbuy.

Here's the link for those who took their SE through the English state schemes;-

http://www.myfirsthome.org.uk/content/1/74/remortgaging.html

AdrenalineJunkie

I'll dig through my paper work from the exchange but thank you so much for your help!!

dimbo61

What happens after the 10 years at 0%? will you then have to pay INTEREST on the loan and at what rate ?
If you can overpay the mortgage every month to help build up your equity in the property.
The very least you can do is keep the mortgage payment static as you will then be overpaying a small amount every month but overpay more if you can afford to.
You should always have an emergency pot of 3/6 months income in cash ISA,s but overpay will save you 3.99% tax free GOOD LUCK

AdrenalineJunkie

You have to pay the loan off at the end of the 10yrs. It is all based on the house price at the time of payment. I don't believe you can just simply pay off £50pm i believe it can only be done at certain stages.

My plan is to move out in about 5/6yrs so will save my money in a savings account

This year is down to clear all CC debts and then next year is deciding what to do with the extra cash but my mortgage drops in June so will keep the payments constant so in theory i'll be over paying by £110pm