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Help to Buy mortgage scheme

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Comments

  • Hi
    I'm looking for some advice on help to buy. Apologies if any of this has been asked already but there are quite a lot of comments on here.

    Here's the situation:
    Our house is up for sale £175k. We expect to get £170k
    That would give us £58k equity to put down on our new house.

    The new home we want is £307k.

    So that would be approximately 19% deposit if my math is correct.

    Would we be able to still get 20% equity loan if we put down a 19% deposit?

    My second question is: in year 6 we would be charged 1.75% of the equity loan (£1067). How is that paid? Is it over the 12 months of years 6 or is over the period of the loan monthly or is it just added on to the equity loan when you pay it back?

    I don't understand the interest payments at all.

    Any help or advice on our situation would be greatly appreciated.
  • I answered my second question.

    Its an annual payment.

    Can anyone offer any advice on paying the loan back. My wife and I have differing opinions.

    My understanding is if we had a loan of £60k we can pay back either 10% of the houses value: i.e. £30k or the full amount.

    My wife thinks it's 10% of the loan: i.e. £6k.. and then another 10%: i.e £5.4k and so on until you own 100%

    Pleeeeease help
  • kingstreet
    kingstreet Posts: 39,335 Forumite
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    Yes you can put down 19% deposit and still have an equity loan of 10% or 20% of the purchase price of a newbuild - your choice.

    Yes, the fees (interest) are payable annually and the HTB Agent HOP will allow you to pay monthly;-

    http://www.myfirsthome.org.uk/

    A 20% loan can be repaid in one or two chunks. If you have a 10% loan, you can only repay it in one. Yes, it's 10% of the property value, not 10% of the loan.

    When you pay off the loan it is based on the property value then, not on the original purchase price.

    HTB Buyer's Guide;-

    http://www.helptobuy.org.uk/docs/default-source/default-document-library/help-to-buy-equity-loan-buyers-guide.pdf?sfvrsn=4
    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.
  • Thank you Kingstreet; that confirms what my understanding was..


    Still can't decide if it's a good option though, as I can't see how we would ever raise £60k+ to pay back the equity without selling
  • Hi
    does anyone know what kind of financial checks are done in the check for Help to Buy? Do they contact your employer etc....
  • kingstreet
    kingstreet Posts: 39,335 Forumite
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    There are none.

    There's a simple affordability calculation, then your solicitor provides copies of the mortgage offer and valuation report which allows the HTB Agent to confirm you are able to get the mortgage you require.
    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 there

    I really need advice on the LIFT new shared equity scheme in scotland. The New build property i am interested in is ready,i viewed the property last week, for my application to go further by the said housing association, i have to arrange 3 mortgage quotes, the housing association require this for their application. I am just wondering if i have to pay for these 3 mortgage quotes from different lenders?? And, also, the 5% percent deposit, is this based on the full asking price (£102,500) or the 60% equity share which is (£61,500).

    SOrry as you cant tell i am really not good with trying to explain, but if anybody has any info i would be really appreciative.

    Thanks
    Polly
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