Help to Buy income limits?

Radionotme

My sister is looking to buy. She found an £80k new build flat that she feels she can afford, but when enquiring about Help to Buy she was told that she earns too much to qualify.
The agent directed her towards a £120k house, where she would be eligible for Help to Buy instead.

Apart from the obvious problem of needing 1/3 more in terms of a deposit, this makes repayments a lot more difficult. Why is Help to Buy pushing people to borrow more than they can afford?

I've tried looking up these limits online, but very few of the sites have hard facts, they mostly read like glossy pamphlets. Can anyone point in the direction to see how these limits are defined?

kingstreet

Help To Buy uses a calculator to establish what is acceptable and affordable. This is Government money, so it tries to ensure those who do not need help do not get it and those who do get the correct amount.

You can contact the HCA HomeBuy Agent for your area and they will gladly go through it with you. If you PM me your email address I'll send you a copy of the excel file, but you may find it difficult to understand what to input and what is already fixed in place.

okborednow

I've been told the companies running the help to buy scheme use a calculator which works in two ways. Firstly it is used to confirm the applicant can afford to make the repayments on the property applied for but secondly if they could afford to make repayments on a higher amount. So as I understand it it comes out three ways...1) approved for equity loan of the fully 20% 2)approved for equity loan for a lesser amount like 10% and finally 3) is declined because they believe the person could afford to buy the propery without assistance. I'm guessing in your sister's case they believe she could raise a 15% deposit and afford a mortgage for the rest. Hope this helps

kingstreet

It also has mortgage income multiplier and rate assumptions and has a set debt/income ratio set into it.

Idiophreak

kingstreet wrote: »

It also has mortgage income multiplier and rate assumptions and has a set debt/income ratio set into it.

...so if she put 10k for a holiday on CC, they might decide she wasn't "too rich" to buy the 80k place?


(just in case...I *am* joking!)