HTB Equity Loan and Mortgage Term

JPB123

betmunch wrote: »

Just had a quick look while my computer sims past an easy cup game in FM!

You can have a mortgage over 35 years, but the equity loan must be paid back no later than 25 years

Not true. If it needs to be extended, it can go out to 35 years. I've just had a case go to offer on 35 years, plus plenty on 30 years. Some Homebuy agents don't like to go over 25 years, others are fine.

I am an Independent Mortgage Adviser


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.

ethank

If your affordability shows that you can repay in 25 years, then you will not be granted an extension.

stalkah

So does the EL need to be extended if we want to have longer than 25 years on the mortgage?


Or would it be fine to have the EL at 25 years and the mortgage over 35?


Like I said we're planning to pay off the EL in the 5 years it's interest free but wanted the mortgage over a longer period.

JPB123

Some Homebuy agents will allow a longer term even if affordability works on 25 years.


The mortgage term and EL term have to match.

I am an Independent Mortgage Adviser

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.

betmunch

JPB123 wrote: »

Not true. If it needs to be extended, it can go out to 35 years. I've just had a case go to offer on 35 years, plus plenty on 30 years. Some Homebuy agents don't like to go over 25 years, others are fine.

Well, you learn something new every day!

stalkah

Anyone have any experience with Orbit the Midlands Agent?

JPB123

Hi Betmunch, I do virtually 99% New Build, so it's the only area my failing, ancient brain remembers

I am an Independent Mortgage Adviser

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.

kingstreet

The mortgage term and the equity loan term aren't linked.

You can have the mortgage term as long as the maximum indicated on the HCA's HTB calculator, normally 40 years/to age 70; although several lenders have a maximum term of 35 years.

I've never seen an equity loan term longer then 25 years. AFAIK it's pre-set by the HCA.

Every Property Information Form I have in front of me reads;-

"The Applicant acknowledges that the term of the Help to Buy equity loan is 25 years (subject to earlier redemption in accordance with the equity loan provisions)"

in section three, and I have Orbit, BPHA and Radian versions.

A longer or shorter mortgage term doesn't change the term of the equity loan.

betmunch

JPB123 wrote: »

Hi Betmunch, I do virtually 99% New Build, so it's the only area my failing, ancient brain remembers

I'm the other way round, 99% existing stock, think I have 1 newbuild in my pipeline, due to complete in August!


More than happy to be corrected by someone that knows better than me.


When answering the enquiry I just checked the first lender-that-came-to-minds website and that said 25 years.

kingstreet

I've just emailed a contact at Orbit to ask about this as JPB is making me second-guess myself.

We've done over 200 HTB - EL cases since launch in April 13 and before that a good few FirstBuy cases too.