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Help to buy - EL
Pidge_jen
Posts: 139 Forumite
Bit of a strange question, hope you can help!
2 friends have got together. Both have help to buy equity loans on their own properties. Friend number 1 lives in the South East, has a help to buy loan on a 1 bed flat and has made enough equity to repay her loan and have a bit left over for a deposit on somewhere bigger (£20k).
Friend number 2 has a 2 bed house in the north west, also with a help to buy equity loan on it, which has depreciated in value leaving him in negative equity to the tune of £15k. Friend number 2 has no way of repaying this unless they remortgage friend 1's property, wiping out all of the equity in her property, and subsequently they would be stuck there. Friend number 2 is already on a debt management plan so couldn't take out a loan to cover the negative equity, and has no savings. He is unable to sublet due to the terms of the help to buy scheme, so currently the house is empty. They are unable to relocate there as their jobs tie them to the south East (friend 2 did plan to move up before he met friend 1, but family circumstances changed just after exchange which made it impossible so the property has been empty ever since).
Would they be able to buy another property, using a help to buy equity loan again, as there is no way they can afford anything else in the south east without this assistance? I have tried looking on help to buy website but with no luck.
Thanks for any advice
2 friends have got together. Both have help to buy equity loans on their own properties. Friend number 1 lives in the South East, has a help to buy loan on a 1 bed flat and has made enough equity to repay her loan and have a bit left over for a deposit on somewhere bigger (£20k).
Friend number 2 has a 2 bed house in the north west, also with a help to buy equity loan on it, which has depreciated in value leaving him in negative equity to the tune of £15k. Friend number 2 has no way of repaying this unless they remortgage friend 1's property, wiping out all of the equity in her property, and subsequently they would be stuck there. Friend number 2 is already on a debt management plan so couldn't take out a loan to cover the negative equity, and has no savings. He is unable to sublet due to the terms of the help to buy scheme, so currently the house is empty. They are unable to relocate there as their jobs tie them to the south East (friend 2 did plan to move up before he met friend 1, but family circumstances changed just after exchange which made it impossible so the property has been empty ever since).
Would they be able to buy another property, using a help to buy equity loan again, as there is no way they can afford anything else in the south east without this assistance? I have tried looking on help to buy website but with no luck.
Thanks for any advice
Baby due 21/06/2017 
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Comments
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No. Not without selling the other two.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Both would have to be sold before they could complete on the new purchase. It would be a clear instruction in the ATE, so the solicitor cannot exchange on the purchase until he has exchanged on the sales.
Note that although you say she has a big equity in her property, have you factored in that the value of the equity has gone up?
For instance, lets say property 1 was bought at £200,000 with equity loan of £40,000. If the value of the house price was now £250,000, the equity to be repaid would be £50,000 not the original £40,000.
Note before selling - an Estate Agent valuation is not good enough - they must have a formal valuation completed by an independent valuer who is a qualified member of the Royal Institute of Chartered Surveyors (RICS).
All info at http://www.myfirsthome.org.uk/schemes/help-to-buy/repayment0
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