Help To Buy - Mtge Guarantee - max. mortgage amount

yakuman

Hello,

Could you please advise if a mortgage guarantee would allow the bank to lend beyond the limit which is established via income multiples?

E.g. if a gross salary is £50k and the income multiple is 4.5, the bank would lend £225k. With a mortgage guarantee of, say, 20% of property price, would the bank be able to lend, in addition to the £225k, the amount equaling to 20% of the property price?


Apologies if this has been answered before

Many thanks!

amnblog

The mortgage guarantee scheme does not allow lenders to alter their criteria.


Your post suggests you are confusing the two H2B Schemes. Either way they do not mean the Lender ignores their criteria.

kingstreet

If anything, you get to borrow less on HTB - MG as lenders are using the Treasury's loan to income caps.

All MG does is increases the availability of 90%+ mortgages. It doesn't allow you to borrow more than you can afford.

Therefore, on an income of £50k, you'll be able to borrow £225k and will need a minimum deposit of £11,842 (5%) to purchase a property for £236,842.

If you plan to buy a newbuild, you may then look at the HTB - Equity Loan scheme, but you may be able to borrow less this way, because the future cost of the equity loan will be taken into account;-

http://www.helptobuy.org.uk/docs/default-source/default-document-library/help-to-buy-equity-loan-buyers-guide.pdf?sfvrsn=4

In this instance, a £50k income would give a mortgage of £225k, 5% deposit of £15,000, HTB equity loan of £60,000 and purchase price of £300,000.