"help to buy schemes" too good to be true?

Jack_Johnson_the_acorn

victoria1980x wrote: »

We're both first time buyers and both with HSBC. Thanks all for the input.

Save harder and you could have a 10% deposit with a rate of 3% if you shop around........

victoria1980x

Jack_Johnson_the_acorn wrote: »

Save harder and you could have a 10% deposit with a rate of 3% if you shop around........

we're trying, but I think we can only get the kind of house we want through the help to buy scheme as I think they can go up to £600,00 (although we won't be looking that high).

A normal mortgage scheme would only give us about £300,00.

I know we can afford repayments as currently we are paying comfortably (although begrudgingly) around £1300 a month in rent.

We are both in jobs where we could do extra shifts at a good rate if needed. OH's a doctor I'm a nurse. Unfortunately we're both clueless with mortgages, hence grateful for the help on here!

Fiveboy

victoria1980x wrote: »

We don't want a new build as we want somewhere with a couple of acres.

You cannot use the HB1 Equity Loan then, you can only apply for the 95%(15% Guaranteed from the tax payer) version HB2. When I last looked at the rates they were around 4.99% for 2 year fixed and 5.49% for 5 year fix.

If the property costs £300,000 you would need a 15k deposit plus fees 9k stamp duty + the other standard costs.

a £285,000 k mortgage at 4.99% over 30 years would cost £1,528.21 per month.

Cat2011

victoria1980x wrote: »

we're trying, but I think we can only get the kind of house we want through the help to buy scheme as I think they can go up to £600,00 (although we won't be looking that high).

A normal mortgage scheme would only give us about £300,00.

I think you might have misunderstood the amount you can borrow. If a "normal" mortgage will lend you 300k based on affordability, then the HTB will also only lend you 300k, as that's all you can afford to borrow. They won't lend you 600k just because you want that much, you still have to pass affordability criteria.

As far as I understand it, the only reason to go with HTB is because you can only save a 5% deposit. If you can save more you are far better off (cheaper repayments) with the "normal" mortgage market.

mai_taylor

We're doing the HTB scheme at the moment with 5% deposit, we've got a 2 year fixed rate for 4.69%. There's no way we would have got a house otherwise.

leveller2911

ethank wrote: »

Equity Loan scheme has been extended until 2020 - but two of the major lenders - Halifax & Nationwide will now will only accept FTB's (rather than those who are selling their own properties) and through their own branch network.

I don't think thats quite right as we have a General Election next year and only the Conservatives have said they intend to extend it till 2020..

victoria1980x

ok thanks, looks like we've got a lot of saving to do yet then!

victoria1980x

Cat2011 wrote: »

I think you might have misunderstood the amount you can borrow. If a "normal" mortgage will lend you 300k based on affordability, then the HTB will also only lend you 300k, as that's all you can afford to borrow. They won't lend you 600k just because you want that much, you still have to pass affordability criteria.

As far as I understand it, the only reason to go with HTB is because you can only save a 5% deposit. If you can save more you are far better off (cheaper repayments) with the "normal" mortgage market.

your right I have misunderstood, thanks for explaining. That's why I thought it was too good to be true.

pmd123

Cat2011 wrote: »

I think you might have misunderstood the amount you can borrow. If a "normal" mortgage will lend you 300k based on affordability, then the HTB will also only lend you 300k, as that's all you can afford to borrow. They won't lend you 600k just because you want that much, you still have to pass affordability criteria.

As far as I understand it, the only reason to go with HTB is because you can only save a 5% deposit. If you can save more you are far better off (cheaper repayments) with the "normal" mortgage market.

Don't be put off by this, unless you have already been told your affordability puts you in the £300k range. As you say, with your OH being a doctor, then unless they're recently qualified I'd expect they will be on a salary well in excess of £50k, and with your salary and any additional income taken into account that may make you eligible for a higher sum.

I'd suggest you discuss with your bank how much they would be prepared to lend you, based upon your joint income, to gauge what you are likely to be able to borrow, before making any hasty decisions.

victoria1980x

pmd123 wrote: »

Don't be put off by this, unless you have already been told your affordability puts you in the £300k range. As you say, with your OH being a doctor, then unless they're recently qualified I'd expect they will be on a salary well in excess of £50k, and with your salary and any additional income taken into account that may make you eligible for a higher sum.

I'd suggest you discuss with your bank how much they would be prepared to lend you, based upon your joint income, to gauge what you are likely to be able to borrow, before making any hasty decisions.

thanks good advice