Help to Buy mortgage scheme

kingstreet

That's how it works.

Do not confuse Help To Buy - Equity Loan with Help To Buy - Mortgage Guarantee.

They are completely different.

BlueberryB

kingstreet wrote: »

That's how it works.

Do not confuse Help To Buy - Equity Loan with Help To Buy - Mortgage Guarantee.

They are completely different.

Thanks very much for clearing that up kingstreet!

We went to see a mortgage advisor this week and he didn't have a clue! He belittled me so much, made it on that I hadn't a clue! I have read that information booklet cover to cover several times and am always online researching! He put it through as though we wanted the MI new buy! Which is completely different! Came back a DIP but would want a 15% deposit which is simply not doable for us!

I got back on to the developer who gave me a name of an advisor who has done a couple HTBs in the past few months for them! Houses will not be started till near the end of this year and be ready early next, which is excellent as this gives us plenty time to save up on top of deposit for fees, turf, upgrades for kitchen etc. we just wanted advice on how to make sure credit files were good and clean up any finances etc so we were in the best possible position when we do apply! I know hubby having a ltd company with only 1 years full accounts (so far) will cause problems, just wanted to see if we stood a chance! I have paid off all catalogue debts, overdrafts this month so hoping that will be updated so near the summer we could be ready to rock

kingstreet

MI NewHome is the Scots version of NewBuy which is the same as the Help To Buy - Mortgage Guarantee scheme, but for newbuilds.

So, if you can find a builder offering it, you could have the choice of MI NewHome, which would give you a mortgage of 90.01 to 95% or you could go Help To Buy - Equity Loan and have the government loan, interest-free, but you must remember when you repay the loan, you repay 20% of the property value at the time, not what you borrowed in £s at the outset!

Clhx

Clhx wrote: »

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.

Just re-asking the above as haven't been able to find the answer anywhere else. Would appreciate thoughts that anyone has on this.

Cheers!

kingstreet

On the HTB - Equity Loan scheme on a newbuild, you can sell the property whenever you like.

If you received a 20% equity loan, on sale, you repay 20% of the property value/sale price at the time;-

http://www.myfirsthome.org.uk/content/1/125/redemption.html

Bubbles77_2

Hi,

Apologies if this has already been asked, but I was wondering if it's better to repay the htb-el or overpay the mortgage first? Clearly, there are a lot of unpredictable factors that effect this, but can anyone help? The interest rates on the equity loan seem quite steep once you head into those years, but clearly the mortgage is a huge amount if money.

Also, is it better financially (overall) to go for the higher rated 95% mortgage or the lower rated equity loan.

If we make the following assumptions:
£200k property value
Inflation/interest rates stay constant
Equity loan mortgage has an initial rate of 2.5%
95% mortgage has initial rate of 5%

How much can the property value increase by before the 95% mortgage becomes the better option overall?

What seems really silly to me is that by buying a house I'd actually save over £250 a month on rent for my little flat!

Thanks for any help/advice anyone has!

kiwijus

We have recently been approved for a 200k mortgage without the help to buy scheme, this is with a 30k deposit (not including fees) which ends up being around 85% LTV.

We have only just started looking into the help to buy scheme and was wondering if it makes more sense to go on the help to buy scheme and put the remaning 20k of our deposit in an ISA/High savings deposit or whether to go ahead without the help to buy?

On a side note, it appears that the help to buy scheme punishes people who have saved for their first house. There's less bargaining power and more competition.

mike12345

ok so you need to pay the deposit yourself if the builder offered me 5% cashback after exchange of contract would this affect my help to buy 20% loan

kingstreet

kiwijus wrote: »

We have recently been approved for a 200k mortgage without the help to buy scheme, this is with a 30k deposit (not including fees) which ends up being around 85% LTV.

We have only just started looking into the help to buy scheme and was wondering if it makes more sense to go on the help to buy scheme and put the remaning 20k of our deposit in an ISA/High savings deposit or whether to go ahead without the help to buy?

On a side note, it appears that the help to buy scheme punishes people who have saved for their first house. There's less bargaining power and more competition.

Are you buying a newbuild?

If not, you have no option. HTB - Equity Loan applies only to newbuilds.

kingstreet

mike12345 wrote: »

ok so you need to pay the deposit yourself if the builder offered me 5% cashback after exchange of contract would this affect my help to buy 20% loan

It shouldn't affect your equity loan, no.

Check with your local HCA Help To Buy Agent. The list is in the back of the HTB Guide;-

http://www.homesandcommunities.co.uk/sites/default/files/our-work/help_to_buy_buyers_guide_sept_2013.pdf

However, many lenders won't accept cash incentives and will simply deducted them from the valuation, so make sure you pick one which accepts them.