Help to buy or not

nothomealone

Hi me and my fianc!e have reserved a new build house costing £17600 and speaking to the builders financial advisor they have said with our £30k deposit we should think about not using htb.


My original plan was to overpay on a 5 year fix then add the htb loan to the mortgage when it comes to remortgage however the advisor says you can only take then full 20% and we would be able to pay a max of around £8k deposit due to our income is this correct? and what would you do in our situation?

kingstreet

nothomealone wrote: »

Hi me and my fianc!e have reserved a new build house costing £17600 and speaking to the builders financial advisor they have said with our £30k deposit we should think about not using htb.


My original plan was to overpay on a 5 year fix then add the htb loan to the mortgage when it comes to remortgage however the advisor says you can only take then full 20% and we would be able to pay a max of around £8k deposit due to our income is this correct? and what would you do in our situation?

Presumably, the property purchase price is £176,000.

I'm not sure I quite understand this, but if I do and you are asking if the Equity Loan amount is reduced due to your income/deposit, the answer is no. It has never happened in my experience and we have done cases where they could clearly borrow more and had very large deposits.

We have had one client choose 10% EL and all the others chose 20%. None were rejected.

As long as the case fits the HTB Calculator;-

mortgage of at least 25% of purchase price
within 4.5 x income
within 45% debt to household income ratio

the approval process is pretty simple with not too much scrutiny of the actual details. We regularly deal with Orbit and Catalyst.

nothomealone

The house price is £176k using the help to buy 20% loan we would require a mortgage of £110,800 in terms of income we currently earn £68k-ish jointly

kingstreet

The HCA HTB Calculator is an Excel file.

If you want a copy, PM me your email address and I'll send you one.

nothomealone

in terms of taking the htb el it makes sense to take the 20% interest free for 5 years then remortgage and pay it off?

kingstreet

What happens if you can't remortgage or get further borrowing from your existing lender?

We read plenty of threads on here about unexpected changes in circumstances, such as relationship breakdown, childbirth etc which affect the borrower's ability to change their plans.

You need to give your exit strategy careful consideration.