Help to Buy mortgage scheme

MSE_Helen_S

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Help to Buy Mortgage Scheme.

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Thanks folks,

pixiedixie

I am considering the 'help to buy mortgage' scheme that is coming in Janury 2014. I understand you get a loan from the government towards you deposit 5years interest free. But if your house then goes up in value and you sell withing the 5years interst free period would they have the rights to a percentage of the profit made or do you solely just have to pay back the money lended?

Thanks
Sarah

Bufger

I'm considering moving up the housing ladder on the help to buy scheme. It looks like a good valid way to encourage people to move up out of properties suited to first time buyers which will help keep the market moving.

My big plan was to overpay and get enough equity to move in 7 years. With this scheme I can do the same in 2-3 so just by the time the scheme ends.

kingstreet

pixiedixie wrote: »

I am considering the 'help to buy mortgage' scheme that is coming in Janury 2014. I understand you get a loan from the government towards you deposit 5years interest free. But if your house then goes up in value and you sell withing the 5years interst free period would they have the rights to a percentage of the profit made or do you solely just have to pay back the money lended?

You are confusing the two schemes. Help To Buy - Equity Loan is already available and it offers upto 20% equity loan interest-free for five years on a newbuild purchase.

The equity loan starts to see a fee charged after five years, starting at 1.75%, increasing each year in line with RPI + 1%.

When you repay, either during the term, or at the end of 25 years, you repay the percentage of the current value. For example, if you buy for £100k with a £20k equity loan and you later sell for £200k, you repay 20%, or £40k.

The scheme being launched in January 2014 is Help To Buy - Mortgage Guarantee and this will ncrease the supply of 95% mortgages on second hand, as well as newbuild property.

sonialal

Hi, My husband and I are looking at these new homes and goverment schemes, the offer sounds abit too good, are these good investments? and once the 5 years are up, your then paying a mortgage and the goverment their money on top (equity loan). Just abit confused as were first time buyers, not sure to save more and wait or go for a government equity loan on a new build?

kingstreet

From the beginning of year six, you pay a fee which starts off at 1.75%pa of the loan amount. This increases each year by RPI+1%pa, so in year seven it's 1.87%, in year eight it's 2.0% and so on, if inflation is 4%pa.

The loan is not paid off by monthly payments. You repay it from the proceeds of the sale, by paying lump sums voluntarily, or as a lump sum at the end of the term.

If you get a 20% loan, what you pay back is 20% of the selling or eventual value. You don't only repay what you originally borrowed in £s.

Macca1980

Hi,

I wonder if you could answer me a question.

If the help to buy scheme - do I have to go through a IFA or can I go direct to a lender to set up a mortgage promise and then the agreement.

Any does any one have any feedback on how the express mover schemes work for new builds

amnblog

The Homes and Communities department says regarding Help to Buy....

'You must see an Independent Financial Advisor (IFA) to gain confirmation of your financial status. The Local HomeBuy Agent and house builders will be able to suggest some IFAs for you to try. '

You can use your own selected adviser.

Also, few Lenders consider these deals so going direct is not straigtforward.

daisy11

Hi, i was wondering if anyone else has applied in Scotland for the lift mortgage scheme.
I have applied to buy from the open market, where the government pays up to a 40% deposit for a property which is paid back on the sale of the house.
I first sent away our application at the start of May and after few weeks hadn't heard anything so after many phone calls i was told it must of got lost in post so was sent another application form and had to start from scratch, this one was sent on 6th of this month and on checking was told they received it and would take 2 wks to process, phoned yesterday and still not been looked at, was told again, 2wks, this seems to be their answer for everything.
Im just getting really frustrated as as there is a house we would love to buy.
I was just wondering if anyone else has had any experience with this process, thanks.

Doots

Hi, I'm thinking about taking advantage of the help to buy scheme but I have a question. Lets say I have paid off 25% of my repayment mortgage in year 6 and I have enough equity to remortgage, can I pay off the 20% government loan with the proceeds?

Thanks

Joyce58

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