"Help to buy" Scheme. Mortgage rules - we don't need one.

maisie14

We have sufficient funds, from draw down pension, to provide 80% of a property we want under the "Help to buy" scheme. We cannot draw down more than that as it would affect our income, drastically.. We have been told by the administrating office for the scheme, that we have to have a mortgage of a minimum 25% to get the "help to buy" even though we do not need this. We think they are deliberately misinterpreting the eligibility rules, and there can be no rational reason why we should have to get a mortgage when we have sufficient funds. My fiance a is middle class ex Managing Director who has up until last year enjoyed a very good lifestyle and income. He recently became divorced at the age of 67 and has had to give his ex-wife two thirds of the proceeds from their house sale. He has been told he will not get a mortgage anywhere in the country in view of the fact of his age and health, he is a smoker. We are not rich, we cannot buy a more expensive property, to buy a cheaper property means buying a place in need of renovation and major costs involved. My fiance is not well enough to do this. He is also not able to be rehoused buy any council as his monthly income plus the money he is getting from the sale of his home, to settle the financial side of his divorce, puts him above the saving threshold for any assistance, but neither does he wish to live in a council flat. We feel that the person in the administrating office for the scheme is being officious and misinterpreting the rules to exclude him, and us. My fiance is Scottish, but lived in England most of his working life, I live in council accommodation that is unsuitable for my needs, in Scotland, and I am English. I got into quite a heated debate with the administrating office clerk, and feel that she is giving biased responses to my inquiries for some reason.

My fiance has a brother and disabled sister in law locally, who he needs to be here to support, as well us wanting to live together in a place of our choice.

We intent to write to our MP to ascertain if it is legal that we MUST have a mortgage to qualify for this scheme even though we do not NEED one, and then the scheme is prejudicial to those coming out of divorces with limited funds, but who also due to age or infirmity would not qualify for a mortgage.

We have been told by the English administrators of scheme, that my fiance does not have to have a mortgage, but he would have to pay rent on the outstanding portion. I think So, we need clarification on this single point,

"Do we have to have a mortgage, if we have sufficient funds to buy 80%?( the maximum contribution required) to be eligible for this scheme?
Many thanks

chanz4

why not go for a normal mortgage ? also help to buy is for those that struggle to buy with low deposits

ACG

I havnt read all of your post but if you have a 75% deposit you have no need for help to buy.

Just a normal mortgage.

Hoploz

Surely Help To Buy is for people who cannot buy without government assistance. I don't think it is meant for people who are ineligible for getting a mortgage.

DTDfanBoy

Help to Buy is a Mortgage Guarantee Scheme, for obvious reasons it isn't suitable for those who don't require a mortgage

stator

I think there is a misunderstanding in your terminology. What do you think Help To Buy is?

Help To Buy is specifically designed to provide high LTV mortgages for people without a large deposit. It is not designed to help people with a large deposit who can't afford the mortgage payments.

If you are talking about a New Built house the Help To Buy scheme only helps if your mortgage is at least 80% LTV! So no use to you at all.

Are you talking about Shared Ownership instead?

Pixie5740

I agree with some of the other posters, you seem to be confused as to what the Help to Buy scheme is, it guarantees a mortgage and it sounds like your fianc! is ineligible for a mortgage so that's pretty much that.

So your options are buy somewhere smaller, but somewhere in a different area, rent.

mrginge

Well done on being middle class.

chewmylegoff

I think the OP is talking about the equity loan HTB that is only available on new builds rather than the Mortgage Guarantee version.

I.e. You put down 5%, the government lends you 20% as an interest free equity loan and and you get a mortgage to cover the rest. Except the OP doesn't want the mortgage but they still want the govt to put the 20% interest free loan in.

If my guess is right then this isn't going to happen regardless of how many letters you write to your MP. The solution is for the OP to buy a cheaper house using the cash they intended to put down as a deposit on this one.

maisie14

We can draw down £112,000 (actually 80%) at a push, BUT NO MORE!!! This will reduce our monthly income by a third, but we can manage, may have to ge t a little part-time work until the pension pot builds up again with the country coming out of recession. House prices do not get any cheaper than where we are!!! Most are around £140,000. We are aged 65 and 67. We can't get a mortgage based on our ages!!!! Both of us are retired.

If the government are able to help those who can get a mortgage up to the 80% , why not those who cannot get a mortgage but have a pension pot and can use the source of our income to buy somewhere decent to live.

to exclude us surely is ageist?



We need help to buy a home as much as those applying for mortgages, but at our age, no lender will touch us. Do you think we should just burn up our money on rent then.

maisie14

chewmylegoff wrote: »

Except the OP doesn't want the mortgage but they still want the govt to put the 20% interest free loan in.

If my guess is right then this isn't going to happen regardless of how many letters you write to your MP. The solution is for the OP to buy a cheaper house using the cash they intended to put down as a deposit on this one.

Its not that we don't want the mortgage, we don't need a mortgage if we have capital, but its not enough to buy a house, where we currently live and wish to stay. (cheapest property in the UK)

The answer is not to buy a cheaper house!!! Cheaper than this is practically a derelict building, do-er up-er or major renovation cost or NSC.