Key worker loan dilemma

AliNetball

Help!!!!!

I have a key worker loan with Thames Valley Housing Association and am desperate to move. I borrowed £56,000 (33%) to take my first step onto the property ladder when I was single; now married and wanting a family we want to up size. Sadly when wanting to move TVH put many obstacles/fees in way so and we would love to pay them off before we move. We have managed to save £25,000 over the years but it's not enough to pay them off.

My question is - Is it worth borrowing more on the mortgage (we owe £95k currently) before we move so we don't have to jump through their hoops and then we can move at our leisure and try to get the most for our property or shall we take it on the chin and keep them until we move. We want to know which is the best to do financially (long term).

Any impartial advice will be greatly received. As a Santander mortgage advisor said that mortgages were changing and it might not be the best action due to early repayment charges. I'm very confused!!

Thanks in advance.

AdrianC

So you started off with 33% shared ownership, £56k mortgage.
Now you have a £95k mortgage - presumably, you've increased the share of ownership?
You're now wanting to sell your share, but have noticed that the HA have rules in place for sale of a shared ownership property? Have they changed since you bought in?
And you're asking if going up to 100% ownership would be easier to sell? The HA will still be your leaseholder, and will likely still have restrictions. What do the HA say about it?

Yes, if you take on an increased mortgage to go up to 100%, then immediately try and sell, there will definitely be increased legal fees and quite possibly early redemption penalties on the mortgage.

AliNetball

Hi,

Sorry no, the 33% totalled £56k the mortgage at the time was £103 - mortgage now at £95k.

I am only paying interest on the loan (due to their restrictions).

Hope that makes sense?

Running_Horse

Glad I'm not a key worker and had to get my mortgage in the normal way.

TBagpuss

Paying them off and then moving will mean two lots of mortgage applications - one for the additionl loan to pay them off, then again when you actually move.

You may have to pa early redemption fees on the new borrowing when you move

You will have to pay 2 sets of legal costs - depending on how the key worker loan is structured there may be valuation fees etc.

I think the first step is to sit down and work out what the *actual* costs will be - then you will be better able to work out whether it makes sense to do it as two separate transactions or as one.

what are the restirctions? My sister had a key worker loan, she had to pay fdor a valuation when she paid it off, as it was based on a % of the value of the property, not on a fixed amount, but there were no other restrictions.

If you have shared ownership rather than a straightforward loan, then there may be restrictions about letting the HA market the property before you can do so, marketing it at their agreed price etc - in which case, it would be worth you speaking to a local agent to find out whether the property will be easier to sell if you pay off the HA first. Also check your lease to see what (if any) restriuctions there are on you selling even if you do pay off the loan / shared ownership.

PeterCu

Thames Valley Housing are basically a nightmare! I have the old equity loan from them where I obtained £40000 to help with the deposit and I have to pay back 24.24 of the resale value OR if they deem I am in breach then I have to pay it back.

However check the small print as what they tell you is quite not the same as what what they tell you over the telephone or in an email so double check.

Due to a serious injury on duty I rented out my home and I am in breach.

Also the loans are unsecured so there is no protection in law and I am just about to go to second stage complaint within TVHA scheme then it is off to the Ombudsman so wish me luck.

Anyone who took out these loans should have had proper legal advice and WE DID NOT HAVE THAT FINANCIAL ADVICE so that is something I plan to raise as their policies and unhelpful unregulated advice is cuasing havoc and people need to unite to fight them!

Pete

ethank

How can a HA make you take out an interest only loan?