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Help to Buy Part 2 - OPENING WITHIN DAYS
Comments
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But this is irrelevant. The person who posted this has wrongly assumed there's an equity loan when there isn't.The problem is that 10% of the value of a house can be a huge sum these days. Not a big issue in place like the north, Scotland etc but in the south-east 10% can be £30k even for a modest house. This isn't small change.
HTB - MG is only about the Government giving the lender a guarantee over the top 15% if the property is repossessed.
The lender is paying for that guarantee.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.0 -
kingstreet wrote: »The lender is paying for that guarantee.
I disagree Kingstreet, ultimately it will be the buyer that pays.0 -
In the context in which it is intended, the point I'm trying to make is that it will not cost the Government anything.
I'm not particularly concerned who it is costing as long as it isn't costing the taxpayer, as I'm arguing against the inference that the taxpayer is picking up the cost of this, when it isn't (yet, if at all).
On your substantive issue, yes, the borrower will pay for it, just as it pays the interest, the fees and everything else which goes into the pricing of a mortgage product.
On the very similar NewBuy, the purchaser is paying more for a property for the privilege of the builder paying 3% of that price into the indemnity fund.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.0 -
kingstreet wrote: »But this is irrelevant. The person who posted this has wrongly assumed there's an equity loan when there isn't.
HTB - MG is only about the Government giving the lender a guarantee over the top 15% if the property is repossessed.
The lender is paying for that guarantee.
So it's therefore more useful for the lender than it is for the borrower. The only advantage I can see for the borrower is that he doesn't have to pay back the government backed part of the loan for five years.0 -
There is no Government backed part of the loan to repay. The borrower gets a single, first charge mortgage for 95% of the price of the property
All the Government is doing is guaranteeing to reimburse the lender the top 15% of the mortgage amount, from 80% upto 95%, if the property is repossessed.
The borrower still faces the same bill, as he will still be expected to cover any shortfall.
It's the same as the old mortgage indemnity insurance scheme, which protected the lender in the vent of repossession and the insurer used its subrogation rights to reclaim any payment to the lender back from the borrower.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.0 -
I think there is some confusion here: there are 2 schemes in Help to Buy - equity loan on new builds and mortgage guarantee.
The equity loan part has been available since April and does require a loan from the government which is interest free for 5 years. The mortgage guarantee part is the one they are talking about in the news atm.
I'm against the equity loan part, I don't see how someone who can only afford to save up a 5% deposit will be able to afford to pay back the loan.0 -
Quite.I think there is some confusion here: there are 2 schemes in Help to Buy - equity loan on new builds and mortgage guarantee
I have been waging a one-man battle to explain that HTB - MG is different and there is no equity loan.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.0 -
Sorry in advance for my ignorance on these matters...
I'm a first time buyer currently in the middle of purchasing a property (Just got the survey back, all is well!). It's a £215k property and I've secured a mortgage at 4.1% with a deposit of £25k down. With these new developments, does anyone think it would be possible for me to go back to my mortgage broker and get a better deal by me putting down 10%, and the government putting in another 10%, and then I'd get a better rate or some such?
I'm really far too uninformed, so if anyone could shed some light on this matter it would be much appreciated!0 -
No. That is not the way the scheme works if this is a second-hand property. The Government is not going to put another 10% down.Sorry in advance for my ignorance on these matters...
I'm a first time buyer currently in the middle of purchasing a property (Just got the survey back, all is well!). It's a £215k property and I've secured a mortgage at 4.1% with a deposit of £25k down. With these new developments, does anyone think it would be possible for me to go back to my mortgage broker and get a better deal by me putting down 10%, and the government putting in another 10%, and then I'd get a better rate or some such?
I'm really far too uninformed, so if anyone could shed some light on this matter it would be much appreciated!
You will not get a better rate.
You are doing the right thing. Carry on.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.0 -
kingstreet wrote: »No. That is not the way the scheme works if this is a second-hand property. The Government is not going to put another 10% down.
You will not get a better rate.
You are doing the right thing. Carry on.
Thanks for the reassurance!0
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