Help to buy scheme

Legacy_user

The Help To Buy scheme seems to talk a lot about being about 5% deposits and you get a 20% loan from the government....


What about if you want to put a higher deposit down - say 10% or 20%.....

Is this ok? If I put down a 20% deposit would I also be able to get on this Help to Buy scheme and get the extra 20% from the government?

or is it restricted to those with a 5% deposit?

System

I seem to never get a reply on these forums....not sure why.

ambioni

dburford9 wrote: »

I seem to never get a reply on these forums....not sure why.

Well you posted your question late last night on a night when most people were probably glued to their TVs....and first thing this morning you are disappointed to have no replies? Give people a chance to get to work and check in to the forum and you might get some responses.

To answer your question the RTB scheme works differently in different parts of the UK (e.g. Scotland and England)- In England you need a MINIMUM of 5% deposit but can put down more, in which case the loan you get from the government would be proportionally reduced, so that you always end up with 25% total. It's only available on new builds up to £600K

In Scotland the house price cannot be more than £400K but there is no interest on the life of the loan from the govt and it can be repaid at any time

kingstreet

The minimum mortgage is 25% of the purchase price, so you can work out the deposit in each case, using 10% or 20% equity loan.

billjohnson1986

kingstreet wrote: »

The minimum mortgage is 25% of the purchase price, so you can work out the deposit in each case, using 10% or 20% equity loan.

Kingstreet is correct, we have done this and it is allowing us 20% of our house price interest free for 5 years (give or take house value in 5 yrs time).

So with 20% HTB and the minimum 25% mortgage then you could effectivley have a LTV of 55% (rather then the minimum 5%).

However you are extremely limited in Lenders, most have strict rules for example you must be first time buyers etc...

Some lenders don't allow a higher LTV either (which makes no sense to me as there is less risk). This leaves you with only a small handful of lenders.

Dave_Z

ambioni wrote: »

In England you need a MINIMUM of 5% deposit but can put down more, in which case the loan you get from the government would be proportionally reduced, so that you always end up with 25% total

That's not how it works. We put down a 6% deposit and still got the 20% from HTB.

kingstreet

Yes. The equity loan is 10% or 20%. Applicant's choice. There is no other option and it is not reduced because of deposit, subject to the minimum mortgage of 25% of the purchase price.

System

Cheers guys....

Just to confirm:

This is my situation...

I would like to purchase a property with HELP TO BUY.

I have a 20% deposit, and it would be very useful for me to have the HTB 20% on top of my own deposit from the government.....

So the total deposit will be 40%.

This is possible with HELP TO BUY? My own 20% deposit will be accepted and I will also be given the 20% from the Goverment - of course assuming that I fulfil all other requirements.

Could you confirm?

and I could in theory (if I had the money) deposit up to 55% of the property value? with the HELP TO BUY scheme adding their 20% therefore making the deposit 75% total.

chris198232

Correct, we had 30% deposit and still chose the full 20% off the government scheme.

kingstreet

dburford9 wrote: »

Cheers guys....

Just to confirm:

This is my situation...

I would like to purchase a property with HELP TO BUY.

I have a 20% deposit, and it would be very useful for me to have the HTB 20% on top of my own deposit from the government.....

So the total deposit will be 40%.

This is possible with HELP TO BUY? My own 20% deposit will be accepted and I will also be given the 20% from the Goverment - of course assuming that I fulfil all other requirements.

Could you confirm?

and I could in theory (if I had the money) deposit up to 55% of the property value? with the HELP TO BUY scheme adding their 20% therefore making the deposit 75% total.

Correct.

However, you should not forget this is a loan and you will start to pay "fees" on it after five years.

The loan is also based on the value of the property, so if you repay half or all of it (those are the two options) you may repay more than you borrowed if the property valuer has increased, or less if the value has fallen.