Confusion over new build mortgages

DepositSaver

Hi there
I am a FTB currently at the stage of researching house/flat prices in my local area and working out what mortgage amount would be affordable for me. I have some questions about Help to Buy, and mortgages on new builds.

There is a new build development nearby (mix of flats and houses) which has flats available on the Help to Buy - Equity Loan scheme, but I am not sure if I'd be eligible for this.

The flats are £122,000 and have a 10% deposit saved up. I earn 33k pa so should in theory be able to get a mortgage for the remaining £109,800. Does this in itself make me ineligible for Help to Buy? Or does it take into account affordability of monthly repayments plus maintenance fees? I read something that said they couldn't be more than 45% of net monthly income?

I'm not actually sure I would want to go the Help to Buy route anyway, as I don't know if I'd be in a position to pay off the loan after 5 years.

So, I wondered whether I would be best to forget Help to Buy and just go in as an "ordinary" buyer. However, I then read in a few places online that most lenders won't lend more than 75 - 80% on new build flats. Is this true? Does this mean I can forget about buying a New Build? Or does the fact that I only have 10% deposit, and thus could not buy this flat without help, mean that I am eligible for the Help to Buy scheme regardless of income?

Sorry if these are very basic questions, I am new to house buying and am only just getting my head round deposits, mortgages etc.

Thank you in advance for your help.

dgtazzman

Just wanted to correct a misunderstanding, the HTB loan doesn't have to be paid after 5 years, you just start paying interest on it at an initial rate of 1.75%, increasing slightly annually in line with inflation. Repayment isn't due for 25 years or when the property is sold, whichever comes first...

kingstreet

There are a couple of lenders who offer 90% on newbuild houses and another couple who offer 85% on newbuild flats.

You need to seek advice on this, to get a full picture of all the options open to you, so talk to a whole market broker with newbuild experience.

DepositSaver

dgtazzman wrote: »

Just wanted to correct a misunderstanding, the HTB loan doesn't have to be paid after 5 years, you just start paying interest on it at an initial rate of 1.75%, increasing slightly annually in line with inflation. Repayment isn't due for 25 years or when the property is sold, whichever comes first...

I should have put in my post that I am aware it doesn't have to be paid back after 5 years, I just would probably want to do so (or at least soon after the 5 years) to avoid the ever increasing interest payments.

DepositSaver

kingstreet wrote: »

There are a couple of lenders who offer 90% on newbuild houses and another couple who offer 85% on newbuild flats.

You need to seek advice on this, to get a full picture of all the options open to you, so talk to a whole market broker with newbuild experience.

Thank you, it's good to know there are some options at more than 80% LTV. Sadly the new build houses available in my area are out of my price range (actually the vast majority of non-new build ones are too), so looks like I'd need to continue to save for a 15% deposit if I did want a new build. You're right, I do need to talk to a broker.