Help to Buy mortgage scheme

kingstreet

You need to speak to them.

They have the right to veto a sale if you don't reach prior agreement with them over the sale price and what they get back.

Your original loan paperwork will explain who to contact and what the situation is if you sell at a loss, or a profit.

If there isn't enough to repay them in full when the mortgage is repaid, they have the right to refuse to life the charge and your solicitor would not be able to offer unencumbered title to your purchaser, hence the sale would stall.

leongant

Ok thanks for your help

AlphaGrills

I'm in my early 30s and have been renting for years. My plan was to have a 10%deposit plus fees next year some time but with house prices looking to be on the rise I'm thinking of taking advantage of the scheme to get on the ladder this year instead. Houses in my area are around 150k and I currently have 11500. My main worry is that I'll miss the chance to get on the ladder and my house prices will move out of reach of my salary. Am I right to look now or not?
Are there any catches to watch out for?
My plan is to get a 5 year fixed rate mortgage so I know where I stand for 5 years. I've got zero credit outstanding and I've been that way for years. Last time I checked expedia I had a score of 999.

kingstreet

It's a mortgage of upto 95% with a rate of around 5% to 5.5%.

Only you can decide if it's "worth it" as you are the one making a decision whether to buy now at 95%, or to wait until your LTV is 90% so you get a better rate.

No-one else can really answer that for you.

Clhx

Something that I haven't seen answered on here yet is if you go into this scheme and then at the end of the 5 years i.e. before you start getting interest you sell the house and subsequently then pay off the government with the sale.

You haven't yet gained extra interest on the 20% they gave you so am I right to assume (a) that they will allow you to sell the house before the end of the 5th year and (b) that the amount you pay them back will be 20% of the house sale price and not the money you first borrowed.

I'm hoping you are able to sell the house before the interest kicks in.

Would appreciate any help, thanks.

anfieldred

Apologies - realise this has probably been asked and answered a million times but I can't find an answer online.

HTB mortgage guarantee -I'm not sure how it works properly. Say I wanted to go for a house at £140k - 5% is £7k deposit required from me. How is the other £132k made up? The government puts in 15% deposit (21k)? so is my mortgage £132k, or £112k?

What happens with paying back the £21k?

Any help with this would be massively appreciated.

Thanks
AnfieldRed

kingstreet

The Government does not put in any deposit.

You put in £7k and your mortgage is 95%, or £133k, if you qualify.

There is no loan. The Government simply guarantees the top 15% of your mortgage in the event of repossession. You pay for this via a higher mortgage rate.

anfieldred

kingstreet wrote: »

The Government does not put in any deposit.

You put in £7k and your mortgage is 95%, or £133k, if you qualify.

There is no loan. The Government simply guarantees the top 15% of your mortgage in the event of repossession. You pay for this via a higher mortgage rate.

Brilliant, thanks for the reply. Wasn't sure what the score was, all the info online seems to say the same thing how long it runs for etc. Just not been able to grasp it, but got it now.

Thank you Kingstreet!

:beer:

kingstreet

Help To Buy - Equity Loan

Provides Government loan of 10% or 20% of purchase price of newbuild only.

Help To Buy - mortgage Guarantee

Provides more 95% mortgages as Government guarantees top 15% so lender covered in the event of repossession. Second-hand only.

BlueberryB

I'm confused yet again! Oh dear lol

When I got the help to buy equity loan fact sheet from a builder I read it as though the government was putting some in and you had to pay it back, either when you sold it or when the mortgage ends? I'm in Scotland too so I know that they have a different scheme. When doing calculations I had it like this

House- new build. £170,000
Our 5% personal deposit £8500
Scottish Government equity loan 20% £34,000
Leaving getting a actual mortgage loan for £127,500
Thus taking our LTV down from 95% to 75% and make lenders feel more secure and bringing payments down?

We are a family of 5 hubby works full time own ltd company and I work part time. Getting a 15% deposit like we were asked for last year is impossible for us to raise what with having 3 kids and living costs just now so when we heard of this HTB we thought brilliant! Could really help people like ourselves who before hand wouldn't have stood a chance of getting our own house!

Please tell me this is how it works?