Help to Buy (Scotland) runs out of money

dklunan

As announced on BBC news last night the Help to Buy scheme (Scotland) has run out of money for this financial year.

Just yesterday we handed over the keys for the sale of our home and were to apply for a HTB mortgage next week but now we are left scrambling to find a 10% deposit instead of a 5% one.

We are fortunate to be living with parents rent free while we wait for the new house but I am not sure how accommodating the builder will be with the extra time we will need.

Some questions -
1. Are there any non-HTB mortgages available for a 5% deposit in Scotland?
2. Do we need to have the deposit physically in our accounts before applying for a mortgage (house will take 6 months to build anyway which is plenty time to save the additional funds - it's just we don't have it right now)
3. Family have offered us a loan to cover the difference which I'm reluctant to accept as I don't want the bank to know we borrowed to support the deposit. They had suggested they could gift is the money and we gift it back later but this seems iffy to me- any thoughts?

Thanks for any help anyone can offer. My thoughts go to anyone in a worse position than ourselves with this development.

FlyingCat

I feel your pain, I am currently in the process of a HTB application (submitted 9th July) and just been told it's not been processed yet. Now face an anxious wait to see if it will be...

We are supposed to be buying our house in 2 months time, so this could really throw a spanner in the works and we may lose our ideal house.

I know there is 5% mortgages out there (Nationwide for example). The problem is the interest rate is much higher (about 5.5% instead of about 3.3% for HTB mortgage). For us that equates to about another £350 a month!

You do not need deposit in the bank to get your agreement in principle, but you will for your actual mortgage application (this happens nearer the completion date, not when you reserve your property with the house builder)

kingstreet

You won't find "normal" 95% mortgages on newbuilds.

As an example, Nationwide max LTV for newbuilds is 85% houses and 75%flats.

You'll have to use the NewBuy scheme, if it's being offered on your property by your builder, or the HTB Mortgage Guarantee Scheme where the lender offers it.

FlyingCat

kingstreet wrote: »

You won't find "normal" 95% mortgages on newbuilds.

As an example, Nationwide max LTV for newbuilds is 85% houses and 75%flats.

You'll have to use the NewBuy scheme, if it's being offered on your property by your builder, or the HTB Mortgage Guarantee Scheme where the lender offers it.

Nationwide do a 95%LTV mortgage, you need to open a Save to Buy savings account and there are some terms around number of payments into that (can't remember off the top of my head), but it's def available for a new build.

kingstreet

I've just phoned and asked to check what I already knew, but then doubted.

95% on STB isn't available on newbuilds. The max LTVs are 85% and 75%, as I said.

They'll only go to 95% on a newbuild if it's being offered on NewBuy or MI New Home by specific builders, where the indemnity fund protects them against losses.

FlyingCat

That sucks about STB then, that was my potential fall back if my Help to Buy application falls through (still hoping it goes through, but starting to get really worried it won't...)

kingstreet

Like I said, HTB - MG is available on newbuilds via a couple of lenders, but they are builder dependent.

I'd have a word with your builder. If they can't sell anything until April 2015 due to the lack of HTB funds, most will be finding ways to help those with a smaller deposit. Their brokers will certainly be working on solutions for them already.

2012_bride

You need to have a save to buy account open for 6 months before you can apply for the mortgage, so if your in no rush

So far as I know, Newbuy is only available through brokers so you would need an intermediary to apply for you.

Don't know if it's different in Scotland but in England my understanding is you pay your reservation fee, apply for your mortgage and then usually 28 days later you have to exchange contracts and pay your 5% deposit then, in our case we are buying off plan so will have to wait 5 months till completion when we will get the mortgage money & pay our fees & stamp duty etc.

amnblog

Good luck on 18th September