Help to buy (Equity Loan) - some questions

testdasi

I'm not too sure about this and my research has yielded nothing.

As I understand it

• The HTB agent will assess my contribution based on deposit + mortgage amount.
• I am expected to take out as big a mortgage as I possibly can so as not to deprive others of the funding.
• Quote: "Your solicitor/conveyancer checks that your mortgage offer, property price and available funds are consistent with the Authority to Proceed"

Questions:

1. I read so many horror stories on the forum about getting loan amount reduced (as compared to the DIP) after the full application is in place. How can the HTB agent knows how much the mortgage amount would be / should be?
2. In the situation above, let's say my loan amount drops by like £5k and I find another £5k (somehow ) to cover the shortfall - would that cause a difference to the "Authority to Proceed"? Does it mean any deal just goes down the drain because the underwriter wants £100 more in deposit?
3. I tried an online "how much you can borrow" calculator and I got a multiplier of about 4.2. Is that low / high / usual / unusual? How realistic is it to receive the same amount after the full application?

Thanks a lot in advance. The forum has been an invaluable resource. :T

kingstreet

As long as you borrow at least 25%, you won't get any issues from the HTB Agent regardless of the choice of equity loan, 10% or 20%.

The HTB calculator allows upto 4.5 x income and a debt to income ratio of upto 45%. As long as you are within that and borrow 25%+ by mortgage, you'll be fine.

Your mortgage lender may be prepared to offer more, but this would see the Government calculator figures taken as you can proceed only with the lower of the two - lender or HTB.