Help to Buy and a deposit of over 5%

Edi81

Exactly the same affordability on HTB guarantee. That includes the stress on interest rates.

jimbo83

Edi81 wrote: »

Exactly the same affordability on HTB guarantee. That includes the stress on interest rates.

What sort of increase do they tend to use during the stress tests?

2-3%?

Teaandtoast0124

7% stress tests so ive read

jimbo83

Teaandtoast0124 wrote: »

7% stress tests so ive read

And increase of, or an increase to, 7%?

I'd read previously about the latter.

kingstreet

Teaandtoast0124 wrote: »

And you can place between 5% and 20% deposit. So yes you can put more deposit down.

NatWest policy is not based on scheme rules.

Provided you borrow at least 25% of the price of the property via mortgage, the rest can be made up by deposit and a 10% or 20% equity loan.

jimbo - most of the HTB - EL lenders ask you to enter 3% of the equity loan as a cost in affordability, one or two 4%.

You need to satisfy the HCA's affordability calculator as well as a lender's. Speak to an experienced newbild broker who can do these calculations for you and ensure you will be able to proceed.

jimbo83

kingstreet wrote: »

NatWest policy is not based on scheme rules.

Provided you borrow at least 25% of the price of the property via mortgage, the rest can be made up by deposit and a 10% or 20% equity loan.

jimbo - most of the HTB - EL lenders ask you to enter 3% of the equity loan as a cost in affordability, one or two 4%.

You need to satisfy the HCA's affordability calculator as well as a lender's. Speak to an experienced newbild broker who can do these calculations for you and ensure you will be able to proceed.

Thanks

I am going to discuss the HTB option with my bank next week, as they offer HTB mortgages.

Do you advise that I appoach the house builder and ask them to put me in touch with a suitable broker for their view too?

kingstreet

Some lenders have specific products for HTB Equity Loan and the rates aren't great.

Others allow you to pick standard products for the LTV taking the equity loan into account.

As an example you might be looking at 1.79% fixed for two years versus 3.44% and the latter has higher setting up costs.

A broker would be best bet for this, unless you just happen to bank with the one lender which has the best deals.