Help to buy now advertised nationally on TV

CLAPTON

maddermanblue1 wrote: »

Don't worry, found it, followed the PDF link on the website. It's no good to me anyhow, I cannot rent a room out to a lodger if I get a place with more than 2 bedrooms, (if needed) it would be illegal apparently.

Regards.

I can't see anything about having a lodger;
are you sure about that?

HAMISH_MCTAVISH

maddermanblue1 wrote: »

Or maybe I don't quite understand the H2B scheme.....

Indeed.

HTB1 is for newbuilds only, involves an equity loan interest free for 5 years, and then with very low fees thereafter. It doesn't preclude having a lodger, but you cannot rent the house out.

HTB2 does not involve an equity loan.

It's simply a mortgage indemnity guarantee for the lender, which the lender pays for at a commercial rate from the government, and then factors into the mortgage costs for the borrower.

Restoring the historically normal, prudent and sensible availability of mortgage lending at 90% to 95% LTV.

Bantex_2

HAMISH_MCTAVISH wrote: »

Indeed.

HTB1 is for newbuilds only, involves an equity loan interest free for 5 years, and then with very low fees thereafter. It doesn't preclude having a lodger, but you cannot rent the house out.

HTB2 does not involve an equity loan.

It's simply a mortgage indemnity guarantee for the lender, which the lender pays for at a commercial rate from the government, and then factors into the mortgage costs for the borrower.

Restoring the historically normal, prudent and sensible availability of mortgage lending at 90% to 95% LTV.

Just get IRs back to normal and we may all start relaxing a bit.

Thrugelmir

CLAPTON wrote: »

there is no actual interest but you pay a 1.5% pa fee (the fee increases each years above inflation)
This is extremely cheap and you won't get anything cheaper.

A % of the increase in the property price is also paid to the Government when the property is sold or loan repaid.

In the event that prices have fallen. The debt still has to be repaid in full.

Turnbull2000

Bantex wrote: »

Just get IRs back to normal and we may all start relaxing a bit.

Current interest rates are normal. 8% was 'normal' in the 80's, 6% was normal in the 90's, and 4% was 'normal' in the 00's. 1% or less is the new phase of normal, and will remain so for over a decade.

CLAPTON

Thrugelmir wrote: »

A % of the increase in the property price is also paid to the Government when the property is sold or loan repaid.

In the event that prices have fallen. The debt still has to be repaid in full.

yes and no

the equity loan percentage is repayable based on the sale price whether or not the price rises or falls.
so if the prices fall you will pay less than you borrowed from the government

Graham_Devon

Thrugelmir wrote: »

In the event that prices have fallen. The debt still has to be repaid in full.

That's not correct.

You just pay 20% of the value of the property (when you sell it) back.

If the property has fallen from 200k to 180k, you would have borrowed 40k from the government. However, at selling at 180k, you pay back 36k and walk away. Leaves the taxpayer 4k down, but that's how the scheme is designed to work.

This is why so many are worried about the effects on the market when HTB is pulled. If HTB is helping increase prices, the removal of it could see prices fall, and therefore, the taxpayer could be significantly out of pocket.

moneyinmypocket

House prices are rising though

wotsthat

Graham_Devon wrote: »

If the property has fallen from 200k to 180k, you would have borrowed 40k from the government. However, at selling at 180k, you pay back 36k and walk away. Leaves the taxpayer 4k down, but that's how the scheme is designed to work.

Sounds like a great deal for the 'bears'. You get to buy now and pay less later if you're willing to put money and mouth in the same place.

Graham_Devon wrote: »

This is why so many are worried about the effects on the market when HTB is pulled. If HTB is helping increase prices, the removal of it could see prices fall, and therefore, the taxpayer could be significantly out of pocket.

Nothing is without risk. Prices may fall but you need to remember to offset fees received against any loss. So far it's a win win - the early adopters are in the money and the taxpayer, depending on running costs, is sat on a paper gain. Some new houses built too.

Turnbull2000

wotsthat wrote: »

the early adopters are in the money and the taxpayer, depending on running costs, is sat on a paper gain.

Said it from the start. Those who get in on the scheme early will do very well indeed!