HTB 1 equity loan.

Teaandtoast0124

Question for anyone who is experienced in the HTB 1 equity loan.

I just wanted to no for peace of mind, is the credit scoring more relaxed for HTB 20% goverment, 5% deposit (75%ltv) than having 10% deposit (90%ltv)

What im trying to say is, do lenders treat you as having a 25% deposit? Or treat you as having a 5% deposit.

Thanks

kingstreet

This varies from lender to lender.

Some underwrite HTB - Equity Loan as a 75% mortgage (or less, depending on deposit).

Others exclude the equity loan and take the LTV as the percentage of the 80% after the equity loan.

Jambo5

Kingstreet, does that mean it should make it easier then... having a bigger deposit then? If some lender's are doing this.

And for the HTB scheme I understand you need a clean credit report, I also understand that with a bigger deposit(in theory with loan) that blips on credit reports have less impact.

Are my right in saying this? Thanks

Teaandtoast0124

Kingstreet, with your experience, do nationwide or halifax class it as a 25% deposit. As i will be trying either of them? Thanks

Teaandtoast0124

Others exclude the equity loan and take the LTV as the percentage of the 80% after the equity loan.[/QUOTE]

Also not understanding this very well. ?

kingstreet

Teaandtoast0124 wrote: »

Others exclude the equity loan and take the LTV as the percentage of the 80% after the equity loan.

Take off the equity loan first.

Then work out the LTV based on the residual purchase price and deposit/mortgage amount.

ie £200,000 purchase. Deducting £40k (20% equity loan) leaves a net purchase price of £160k. Your min 5% deposit is £10k and your mortgage £150k.

The LTV is then £150k divided by £160k, or 93.75%.

I will not give answers which lead towards particular lenders.

kingstreet

Jambo5 wrote: »

Kingstreet, does that mean it should make it easier then... having a bigger deposit then? If some lender's are doing this.

The bigger the deposit and hence the lower the loan to value the lower the required credit score has always been as the relative risk of a 60% mortgage is less than a 75% mortgage which is less than a 90% mortgage etc.

And for the HTB scheme I understand you need a clean credit report, I also understand that with a bigger deposit(in theory with loan) that blips on credit reports have less impact.

Are my right in saying this? Thanks

I think I may have summarised that in the last paragraph, subject to lender chosen.

Teaandtoast0124

Ok thanks for that kingstreet