Help to buy scheme

joe134

kingstreet wrote: »

ex/c - existing mortgage customer/borrower?

bbr - bank base rate? Can be Bank of England or in Barclays' case, Barclays Bank Base rate (currently same at 0.5%).

Thanks, your patience does you proud:beer:

Fitzkepp

Cripes, this is all very complicated stuff that I see coming over the horizon.

My wife and I are first time buyers, we aim to have about £25k deposit saved by the spring and have been trying to keep an eye on the HTP - MG and understand its implications. We're aiming for an older home rather than newbuild.

I've been looking on comparison sites today and been actually quite depressed by what appears to be the range of options, I'd thought £25k deposit and combined annual gross salary of £50k would see us comfortably talking about a 200k property. Seems not to be the case (but then again, that's just internet estimates rather than speaking to a broker).

Anyway, as I understand it the HTP - MG is essentially an additional guarantee from the govt to lender over my ability to repay, and thus an influence on a) how many lenders will consider me and b) what rate I get. Other than that, there's no "government loan" so to speak?

kingstreet

That's correct.

Using 5x joint gross income (which would be less any credit/dependent costs) you can buy for upto £275k.

Don't forget you'll need to be able to cover stamp duty, legal costs etc.

As you'll have about 10% deposit anyway, why are you thinking of HTB-MG? You'll probably get a better deal without it, as the lender has to pay the Government for the guarantee.

joe134

Fitzkepp wrote: »

Cripes, this is all very complicated stuff that I see coming over the horizon.

My wife and I are first time buyers, we aim to have about £25k deposit saved by the spring and have been trying to keep an eye on the HTP - MG and understand its implications. We're aiming for an older home rather than newbuild.

I've been looking on comparison sites today and been actually quite depressed by what appears to be the range of options, I'd thought £25k deposit and combined annual gross salary of £50k would see us comfortably talking about a 200k property. Seems not to be the case (but then again, that's just internet estimates rather than speaking to a broker).

Anyway, as I understand it the HTP - MG is essentially an additional guarantee from the govt to lender over my ability to repay, and thus an influence on a) how many lenders will consider me and b) what rate I get. Other than that, there's no "government loan" so to speak?

Personally, I don,t think it,s gonna make any difference, because, it,s new housing stock that,s needed, so, newbuy is the option the Gov, and builders want, not others.
They have more influence over the market, inflate prices, something they cannot do with second hand homes,so house prices will stay high. I,m glad part 2 doesn,t come with equity loan, because, I fear it,s gonna lead to disaster for lots of people.
worse than interest only on the 20% loan, as it has to be paid, and as kingstreet pointed out to me, it,s the house value, not the loan, so a double whammy, unless you are sure of coming into some money
.I,m trying to get my Grandson away from HTB MG, stick to the traditional way, even if it takes longer.
I cannot see where HTB comes in with MG, unless you buy a new house, there,s no HTB for second hand houses.

joe134

Hi Guys, is MSE mortgage calculator wrong, or is it me. Grandson earns £36k, and the calculator, L&C says he can borrow £144k.then, £145k @ 5 times earnings???
I thought 4.5 times earnings is £162k? he has £15k deposit, for 90>95% mortgage.Not newbuy
what,s anyone,s opinion please

kingstreet

The maximum is usually 5x salary (allow 50% of OT/Bonus etc), less the cost of credit commitments, dependents etc.

So, no credit/dependents and £36k salary indicates maximum mortgage of £180,000 over 25 years or longer.

joe134

kingstreet wrote: »

The maximum is usually 5x salary (allow 50% of OT/Bonus etc), less the cost of credit commitments, dependents etc.

So, no credit/dependents and £36k salary indicates maximum mortgage of £180,000 over 25 years or longer.

Thanks kingstreet, so it wasn,t me, MSE,s calculator is duff.

Fitzkepp

kingstreet wrote: »

That's correct.

Using 5x joint gross income (which would be less any credit/dependent costs) you can buy for upto £275k.

Don't forget you'll need to be able to cover stamp duty, legal costs etc.

As you'll have about 10% deposit anyway, why are you thinking of HTB-MG? You'll probably get a better deal without it, as the lender has to pay the Government for the guarantee.

Yes the £25k deposit assumes a separate slush for paying the stamp duty and costs, we're budgeting £4k for that at the moment.

As regards why we're thinking of the HTB-MG to be honest I'm still getting my head round what the implications are. I'd assumed as we're first time buyers the deal/range of deals available to us would be better once that kicked in (plus we won't have the full deposit accumulated until spring). What you've said above is there may be a better deal without it - can you elaborate on that?

My rough basis for judging likely availability is our income gives us a ceiling of £275k but our deposit would limit us to £250k.

kingstreet

TBH I don't know, but I expect a 90% product with no HTB-MG will be at a better rate than one with.

90% products now tend to be better than the NewBuy rates which the new scheme most closely matches.

Fitzkepp

Fair enough. Out of interest where do you get the 4.5/5 x gross income calculation from? It seems higher than the online calculations im offered.