£40,000 secured loan against property... easy buy scheme

kayleigh_notts

Firstly i wasnt sure wether to post this here or under mortgages so appologies if incorrect...

Me and my partner purchased our first property in 2009, a New Build from Crest Nicholson... We did this through their easy buy scheme which mean the home builders lend you 25% of the property value as a secured loan against the property... we negotiated down from £180,000 purchase price down to £160,000 so we got a mortgage with Nationwide for £120,000 and then £40,000 from Crest Nicholson... years 1 to 5 you dont pay any interest on the £40,000 but from then onwards its fixed at 3% pa... Then at year 10 they want their £40,000 back...

We have been very naive as this is our first time buying a property and borrowing, as we believed when it came to near year 10 we would re-mortgage and pay Crest their £40,000 however after being into the agreement 6 years in july 2015 my partner was looking at different mortgage options but he noticed something called "LTV" which he has researched and found out it means Loan to Value and most of the really good rates to keep our repayments within £100 of what we are paying now only has around 60 - 65% LTV

So we have been really panicking about how we are going to pay the £40,000 back...

We mortgaged for £120,000 and that now stands at £108,000

Does anybody have any ideas how we could get the money to pay the £40,000 back to the home builder... any ideas or thoughts on this we would be most appreciative

sinizterguy

How much can you save between now and then to put towards this payment ?


Also, the value of the property may have increased, allowing you remortgage with a higher mortgage value to allow you to pay back this £40k.

The rates are obviously dependent on the LTV as you have seen, and there is no easy answer for that.

WillyWonga

What would you say a valuation on your house would now come back as today going by what has sold around you recently??

kayleigh_notts

@sinizterguy hopefully would be able to save around £8k - £10k

@willywonga im unsure as i havent a clue what properties have been selling for locally... is there any tool i could use to find out ??

Thanks so much for the help so far

WillyWonga

Am I right in saying that you didnt put any money down yourselves as a deposit?? Instead you got 25% from Crest and a 75% Mortgage from Nationwide?

Try Zoopla as a property guide, pop in your postcode under sold prices section to give it a rough value.

kayleigh_notts

Yes that is correct 25% (40k) crest, 75% (120k) nationwide... as i believe it crest are then entitled to 25% of the market value upon repayment...

ive done that on zoopla and around 1 in 5 houses have made in between 10k - 50k within the 5 years this site has been developed... the rest have sold for what they purchased for...

kayleigh_notts

on zoopla it estimates my property at around 178k

jobdone1

If i understand it they get 25% of market value or £40k which ever the greater. So if that is the case if your property has increased in value from original purchase price then that £40k will be greater i.e property value £200k 25% of that £50k is that the terms of the agreement ???

WillyWonga

At best you need to remortgage for £148k on a house worth £178k - around 83% LTV

Have you approached Nationwide to see if they can remortgage to consolidate the Crest secured loan?

My best advice would be to go and see a whole of the market mortgage broker. See if friends have used one recently or search on the internet. Basically with the secured loan with Crest and the high LTV which it will take to clear them there will only be a few lenders wanting to take this on (for eg try London and County) . It will also depend on your credit score, commitments etc etc. An initial chat with them on the phone explaining situation and giving a few details will establish a way forward.

Good luck

Rollingstart

I suppose a personal loan would be out of the question given the level of debt?

I think Sainsbury's were offering very low rates up to a maximum of 30k recently.

Certainly a lot easier than getting a mortgage but I think you might not be able to use them for this sort of thing. They tend to dislike them being used for anything to do with housing.

kayleigh_notts

jobdone1 wrote: »

If i understand it they get 25% of market value or £40k which ever the greater. So if that is the case if your property has increased in value from original purchase price then that £40k will be greater i.e property value £200k 25% of that £50k is that the terms of the agreement ???

I think you are very close but i believe if the property price falls then crest are still only entitled to 25% of the market value... e.g market value of £120k then their 40k turns into 30k