Help To Buy for existing home owner - Advice Please?

ash213

Hi Guys.

I currently have a mortgage which I took out in August 2014.

I am looking to move some where slightly better and more expensive and noticed this 'help to buy' scheme.

Just wondered as an existing mortgage holder, would i be eligible to switch to this?

To make things clear, I have a cheap property, value around 116k, deposit of 10% was put down on purchase.

Im looking to get move to some where slightly more expensive and better and thought the Help To Buy could assist me with this...

Any advice would be great? I phoned my current provider HSBC and they said the phone help desk have no training on the HTB scheme, great!

Thanks

libf

Help To Buy is open to home movers.

I currently have a shared ownership flat and am in the process of using Help To Buy to purchase a 3 bed house.

http://www.helptobuymidlands.co.uk/am-i-eligible

ash213

libf wrote: »

Help To Buy is open to home movers.

I currently have a shared ownership flat and am in the process of using Help To Buy to purchase a 3 bed house.

http://www.helptobuymidlands.co.uk/am-i-eligible

Thank you for that. Apreciate the response.

I have a normal mortgage on my property, but hopefully same applies with me.

I'm just confused on how to work out figures etc.

Lets my current property was 116 with 10% deposit

and i wanted to buy a property of value 140k with the HTB scheme, i would need 5% right...which is 7k?

Cheers.

kingstreet

If your new property will be your only property, you can use HTB.

If it's a newbuild, you can use HTB - Equity Loan and borrow 20% additional deposit from the Government, interest-free for five years.

Payments of interest (or fees) start in year six and the loan is based on the % of the purchase price, so 20% loan means you repay 20% of the property value when you sell, or want to repay.

HTB - Mortgage Guarantee means more 95% mortgages, but no loan and no bigger/more expensive property. It's just a normal 95% mortgage to the end-user and the rate is 4.5% to 5.5% pa.

ash213

kingstreet wrote: »

If your new property will be your only property, you can use HTB.

If it's a newbuild, you can use HTB - Equity Loan and borrow 20% additional deposit from the Government, interest-free for five years.

Payments of interest (or fees) start in year six and the loan is based on the % of the purchase price, so 20% loan means you repay 20% of the property value when you sell, or want to repay.

HTB - Mortgage Guarantee means more 95% mortgages, but no loan and no bigger/more expensive property. It's just a normal 95% mortgage to the end-user and the rate is 4.5% to 5.5% pa.

No bigger/more expensive home?

Lets say i do this.

Current property purchased 116k - deposit 12k.

(A year of payments towards the mortgage and possible rise in value as I will try to sell slightly higher)

Next property with 5% deposit on HTB, value 150k and deposit 7.5k

Obviously depending on my proof of earnings, but this would be possible?

kingstreet

I was trying to say tat HTB - MG doesn't give you an equity loan to swell your deposit and get you a more expensive property.

I'm not suggesting you can't get a property more expensive than the one you already have. That would depend on affordability and deposit.

sheramber

ash213 wrote: »

Hi Guys.

I currently have a mortgage which I took out in August 2014.

I am looking to move some where slightly better and more expensive and noticed this 'help to buy' scheme.

Just wondered as an existing mortgage holder, would i be eligible to switch to this?

To make things clear, I have a cheap property, value around 116k, deposit of 10% was put down on purchase.

Im looking to get move to some where slightly more expensive and better and thought the Help To Buy could assist me with this...

Any advice would be great? I phoned my current provider HSBC and they said the phone help desk have no training on the HTB scheme, great!

Thanks

did you phone the mortgage advisors

https://www.hsbc.co.uk/1/2/mortgages

ash213

Yes I have to go in branch as they claim they have no training on the help to buy scheme over the phone.

Usless.

And he is asking me to take in about 300 documents etc, even though I already have a mortgage with them.

Utter pain in the !!!

Pointless.

libf

ash213 wrote: »

No bigger/more expensive home?

Lets say i do this.

Current property purchased 116k - deposit 12k.

(A year of payments towards the mortgage and possible rise in value as I will try to sell slightly higher)

Next property with 5% deposit on HTB, value 150k and deposit 7.5k

Obviously depending on my proof of earnings, but this would be possible?

The deposit you put down originally on your current property doesn't matter at this point. You need to work out what you would be left with after a sale, so...

Value of sale - remaining mortgage - any fees for redeeming mortgage - fees for selling the property - fees for conveyancing on the sale + savings = monies from sale

So for example:

120k - 100k = 20k of equity

But then you need to pay:
Mortgage redemption charge - £60
Mortgage ERC - £1000
1% of sale to EA - £1200
Conveyancing - £500

So that example leaves you with £17,440 from the sale to use as a deposit, plus any savings you want to put in.

You could then do 5% deposit, 20% equity loan and 75% mortgage on a NEW BUILD with HelpToBuy, but you'd get a better mortgage rate doing 10% deposit, 20% equity loan and 70% mortgage.

Also, with Help To Buy you can only borrow 4.5x your salary (after accounting for loans) and your mortgage payments can't be more then 45% of your net income, so you'd need to consider that as well as all the mortgage affordability criteria.