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Help to Buy mortgage scheme

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Comments

  • kingstreet
    kingstreet Posts: 39,335 Forumite
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    No. That's not what HTB is designed to do.

    You need to look at the mortgage rates and the term over which you can take your mortgage, to work out the amount on which you could afford the monthly payments.

    Then you need to put your current home on the market.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Hello all...apologies if my queries have already been addressed...its a little confusing minefield!
    I put in a joint application for HTB 95% mortgage through a broker who told me that Halifax and I think First Direct (not completely sure) were the only two on board with this new government scheme until Jan 2014 when the rest of the market will be opened up... we have a combined income of £65000 approx. with we hope approx £30,000 equity in our house to sell. Our credit scores are around 780 mark ..but we were turned down due to what the broker said was our credit!...and also that to qualify for HTB you would require a 100% credit rating! ...now im not sure what truths I was being told...only this evening I caught on dispatches the same agency telling a client that only Countrywide were lending at this time!! we were however approved for a 90% which is brilliant but would prefer to achieve a 95% in order to make that further leap up the ladder...sorry if this is a little confusing!!
    any advice on finding an unbiased broker??
    thank you
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    but we were turned down due to what the broker said was our credit!...

    Forget the the CRA score. Lenders will assess you according to their own internal criteria. For 95% lending the criteria will be stringent.
    So late payments, defaults, current unsecured debt levels etc will all be potential factors that may impact your application.
  • ok, so what happens if the builder is offereing to pay the 5% deposit?
    Can you you still have the help to buy 20% loan???
  • ManchegoMan
    ManchegoMan Posts: 44 Forumite
    Part of the Furniture Combo Breaker
    edited 28 November 2013 at 5:33PM
    Hi, The HTB-EL scheme seems like a good plan for us. Our situation is that we took out a 85% LTV mortgage a couple of years ago on a house worth approx 320k - repayments are comfortable, but the interest rate is a 3.29% above base lifetime tracker (so currently 3.79%). We ran some debt up to get the SDLT payment beforehand. This still needs paying off as we were doing balance transfers from credit card to credit card. Have since taken out a low rate loan to pay those CC debts off so thats all we have in debt other than the mortgage.

    Now as far as I understand it we can now join the HTB-EL scheme if we are looking to buy a new build home. To move up the ladder we are looking at a 4 or 5 bed home and in my area they range from 400k to 600k. I had a valuation on my house at £348k so assuming I can get £335k for it will leave me with some equity of around 75K. My idea is that I get a 75% LTV mortgage 351k on a 470k new house. I pay 25k deposit and the EL will be around 96k. After I've paid estate agent, solicitor and moving fees plus mortgage arrangement costs etc I could be left with some money to keep until the 5 year interest free period is up on the EL where I would then need to think about staircasing my payments to pay the EL off.

    Does anybody see any flaws in this idea? - my reasoning is that with equity released into my pocket rather than tied up it protects us in case of job loss etc. The other reason is that I would only require a 75% mortgage thus it means a better rate and that more of the repayment amount will pay of more capital instead of interest (although I am aware that I will have a bigger mortgage). I was thinking of finding a 5 year fix rate as its possible interest rates might move up soon. There is of course the SDLT to pay yet again which is a huge amount of money to hand over again in a short period of time. Oh, and I would use some of the freed up cash to pay off the loan I just took out to repay the CC debt as mentioned above.
  • rjw1204 wrote: »
    ok, so what happens if the builder is offereing to pay the 5% deposit?
    Can you you still have the help to buy 20% loan???

    anyone?

    I guess, they will lend the 20% on the basis you can show you havea 5% deposit yourself??

    ie they won't lend you it if the builder of the new builds is putting the 5% in??
  • kingstreet
    kingstreet Posts: 39,335 Forumite
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    You can't use HTB if you do not put in a personal deposit yourself.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Hi all. Would like to share our experience to date. We have been approved by the government help to buy scheme with their 20% deposit. The process is 'fairly' straightforward however we have had to make a few amendments to get things finalised! The help to buy only accept up to 5% incentives so be aware of this when bartering with house builders AND some of the lenders only allow 1%!! Nationwide accept 5%. In other words it's unlikely they will allow 5% deposit paid from builders but you could get around that with a discount/stamp duty equating to 5%. Not all builders were willing to give discounts. Barrett's are the Worst! All builders were prepared to pay stamp duty & some would offer other incentives like flooring etc. we are buying in Scotland so have the added bonus of the interest free period being for the entire length of the mortgage not just 5 years. The only query I have just now us the government side of it have mentioned an 18 year max on the mortgage so need to find out what they mean by this - are they dictating what term of mortgage we can take out due to our age?? Watch this space....
  • Hi,

    i`m thinking to buy house by shared equity sheme.
    So i would own 75% of the property and council 25%. Now i`m totaly confused. Is ti good decision or not? Does anyone have bought through this scheme?
  • kingstreet
    kingstreet Posts: 39,335 Forumite
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    edited 5 January 2014 at 1:27PM
    What you are describing is shared ownership, not shared equity.

    Shared Ownership

    You purchase a share of the property and ownership of the other share is held, normally, by a Housing Association. You will probably pay rent on the unowned share and the property will be leasehold.

    You can purchase new, or existing property, using shared ownership. You can purchase further shares, perhaps upto 100% (check your scheme/property) using a process called "staircasing."

    Shared Equity

    You purchase the whole of the property, but a third party, such as Government or a builder puts up part of your deposit using an equity loan. The loan is secured on the property. When you sell, you repay the loan. If you were given 20% loan at purchase, you repay 20% of the property value at the time, when you sell.

    The loan can be interest-free for the whole term, or for a fixed period. The property can be freehold, or leasehold. Usually, this is confined to newbuild only, in England. Scotland has a DIY shared equity scheme called LIFT.

    Only you can decide if either option suits you.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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