Help to Buy mortgage scheme

kingstreet

weejas wrote: »

Can you use the governments 20% as an interest free loan for 5yrs and then pay it off or is the house revalued at that point to work out how much you owe them due to any increase in the house value?

Looking at a house of £300k (new build) with a deposit of £240k so could the additional amount be funded using the help to buy scheme and paid off with zero interest over the first five years?

thx

No. You must borrow the amount indicated by your income by mortgage, with a minimum of 25% of the purchase price.

When you repay the HTB loan, you repay 20% of the property value at the time, not 20% of the original purchase price.

HRHlondon

Hi everyone! I am putting a foot into the adult world and looking to buy my first place and think the help to buy scheme will work for me. My question is on repaying the government equity loan back. As I need to put a little more of a deposit down I would be looking to have the scheme cover 18%, I know you must pay off the loan in full on selling but I can also see you can start paying off the loan sooner in chunks of 10% and 20% but what it doesn't say is when you can start doing this? As in after two years could I make a payment to clear a large chunk of the equity loan or do I have to wait until a certain year?

Thanks in advance
Heather

kingstreet

The loan is 0%, 10% or 20% of the property value. You can't pick a figure.

Repayments are 10% of property value, or 20% of property value, so you can repay a 10% loan in one chunk, or a 20% loan in two.

It isn't 10% of the loan. It's half of it, or all of it.

You can make repayments whenever you want. It is 10% or 20% of the property value at the time, whether higher or lower than the original £ value.

http://www.myfirsthome.org.uk/content/1/124/staircasing.html

shinyahashimoto1

Does anyone have any definite details on the plan Help to Buy - Mortgage Guarantee Scheme coming in January 2014? I live in Scotland, currently own my flat however cannot sell it at the moment, so would be interested in this to buy a house with only 5% deposit. It appears this new scheme is underwritten by the Government, so you do not have a 15/20% "Loan" to pay back, you just have a regular 95% mortgage.

On MSE main website is lists the following:

This scheme is designed for anyone with a deposit of less than 20%, on any type of home. This includes people already on the property ladder but who don't have the cash and/or equity in their current home to make the next step up. People will not be able to use the scheme to buy a second home however and will have to sign a declaration to confirm this.

If this is correct, it would be ideal for me. Hopefully more information will come sooner.

jcbjcb

I am looking to buy a new build flat under the Help to Buy equity scheme but someone has said that new mortgage lenders will only give around 65% on build flats - anyone know if that's correct?

jacobtheamish

shinyahashimoto1 wrote: »

Does anyone have any definite details on the plan Help to Buy - Mortgage Guarantee Scheme coming in January 2014? I live in Scotland, currently own my flat however cannot sell it at the moment, so would be interested in this to buy a house with only 5% deposit. It appears this new scheme is underwritten by the Government, so you do not have a 15/20% "Loan" to pay back, you just have a regular 95% mortgage.

On MSE main website is lists the following:

This scheme is designed for anyone with a deposit of less than 20%, on any type of home. This includes people already on the property ladder but who don't have the cash and/or equity in their current home to make the next step up. People will not be able to use the scheme to buy a second home however and will have to sign a declaration to confirm this.

If this is correct, it would be ideal for me. Hopefully more information will come sooner.

Its not currently on the agenda for Scotland, I believe they are watching what happens in England before considering whether to offer it

jacobtheamish

jcbjcb wrote: »

I am looking to buy a new build flat under the Help to Buy equity scheme but someone has said that new mortgage lenders will only give around 65% on build flats - anyone know if that's correct?

Nope, you will need a Help to Buy mortgage, via one of the 7 lenders that currently offer them. You will need a minimum deposit of 5% upto 55% if you take the full equity loan from the HA. The mortgage has to be a minimum of 25%. I would suggest speaking to a broker who can fit in with the likely 28 day exchange deadline. Plenty of fee free brokers out there for this purpose.
Which developer and region are you looking to buy in?

kingstreet

The biggest LTV you'll get on a newbuild flat is 85%.

As jta has said, you can use HTB - EL to get your deposit up to 25%, leaving you needing a 75% mortgage and there are many lenders who offer that LTV on the scheme on a flat.

Just to build on from there, you can borrow upto 4.5X gross annual income and the debt to income ratio has to be within 45%.

If you want a copy of the HCA Help To Buy calculator (Excel file_ Pm me your email address and I'll send you a copy.

kingstreet

jacobtheamish wrote: »

Its not currently on the agenda for Scotland, I believe they are watching what happens in England before considering whether to offer it

HTB - Equity Loan started in Scotland on 30 September 2013 and HTB - Mortgage Guarantee applies equally in Scotland from last week.

https://www.gov.uk/government/publications/help-to-buy-mortgage-guarantee-scheme-rules

Trinabeans

We own a 3 bedroom home which we bought 10 years ago. Despite having approximately £ 80, 000 in equity in it we cannot currently afford to increase our monthly repayments due to our current income. Can the government help to buy scheme help us to move up the property ladder without incurring an immediate increase in our mortgage repayments? (we would not want a new build property).
Thanks in advance for any comments.