Help To Buy - For non first-time buyers (existing homeowners)

MoneySpendingExpert888

Currently we have about 30% equity in our existing home and we have just found out that the help-to-buy scheme is available to existing homeowners and not just FTB's.

I believe the stipulations are exactly the same e.g. 5% deposit + 20% government contribution.

Just wondering if any existing homeowners have gone through the help to buy process and if it is straightforward? or is it based on a priority-based application system e.g. I want to 'upgrade' to a larger house and i have a good amount of equity in my existing home might not be seen as more important as giving the funds to a first time buyer who is just trying to get their foot on the property ladder.

any advice would be appreciated. Thanks in advance

ACG

I have only ever done HTB2 for home movers.
Providing the property you currently own is being sold and it all goes through at the same time there should be no issue. I must admit it was something the lender did not think could be done. I had to kick up a bit of a fuss and get a manager involved to get it resolved but that aws about 12-18 months ago.

BartyBoy

MoneySpendingExpert888 wrote: »

Just wondering if any existing homeowners have gone through the help to buy process and if it is straightforward?

The Help to Buy process is very straightforward but all the information that you provide to the H2B agent must be accurate and correct. One tiny little mis-match or error, they will reject the application straight away. My partner had to re-apply twice, but still it was all approved in 2 weeks.

Not 100% sure, but I think on the form there was a question asking if you own a property in the UK. My understanding is, the H2B scheme is for those who don't own a property at the time they apply for the loan. For example, if you owned a property before, but you don't own any now, you can apply for the 20% equity loan, not just for the 1st time buyer.

In terms of you in the process of selling your property now, I don't know how the HSB agent will treat your application. Will they accept the fact that you are selling your property now and buy another one, or will they say you must have sold yours first then buy another one? I don't know...

kingstreet

Newbuild only, you understand?

Existing property must be sold on or before completion of the new one.

Minimum deposit is 5%, but you can put down upto 55% with a 20% equity loan and minimum 25% mortgage.

PurplePow

I'm looking to do Help to Buy Mortgage Guarantee when we move due to negative equity so we will probably only have around 6-7% deposit. Is it the same as a poster above put it that "the H2B scheme is for those who don't own a property at the time they apply for the loan" - because that would make no sense as they advertise the mortgage guarantee as a way to help home movers??

This is not for the new build help to buy equity loan scheme as we don't want a new build.

MoneySpendingExpert888

Ah right ok understood. so as long as the house is in the process of being sold or has been sold by the time you make your application then it should be ok? The only confusing bit was that it was labelled as

"homeowners looking to move" if they use the 'homeowners' title then i thought that surely you can still own a home when you make the application as long as you can prove that you are 'actively' trying to get it sold during the process. e.g. listed with an estate agent, at a reasonable market price etc

having looked on the official H2B website it doesnt seem like there is any real point of contact who you can speak to regarding this issue, because the 'homeowners looking to move' sentence seems quite vague im guessing that some sales agents for newbuild developments will interpret this in their own context and might not know what the yes or no answer is to people in my situation.

KittyCat1

Can you do a part exchange on a new build and still take up the HTB?

kingstreet

KittyCat1 wrote: »

Can you do a part exchange on a new build and still take up the HTB?

No. Assisted sale, yes. Part-exchange no.

Speak to builder about the difference.

For the others, you can own another property at the time of application, but it must be sold ON OR BEFORE COMPLETION of the new purchase.

On other words, you won't be able to own the new one, before you've sold the old one. Not just agreed a sale, actually sold.

stalkah

Also the sales team probably won't let you reserve the new build until you have excepted an offer on your existing property.

MoneySpendingExpert888

thanks for the help guys, some really useful information to get me in gear on what to do next.

i found this document on their website:

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

and at the bottom it lists a direct contact for H2B advice in different regional areas. I have just spoken to my local H2B agent and they have basically confirmed the points given by kingstreet (need to have sold your house before you can complete on the newbuild)

I have previously bought a newbuild before and manage to negotiate a good 12% off the asking price, this time around will going through this H2B scheme make you ineligible to haggle on the price of the house?

I only ask this because when I spoke to the developer they said that some lenders are not flexible when it comes to agreeing to 'incentives' that might come with the property, she said that some can offer "help to buy" and nothing else. Whereas another lender might offer "help to buy with x% deposit contribution/ legal fees paid etc"

If this is the case then i can't understand why some won't let you take incentives because surely you are getting more for your money if the developer is offering 'extras' in order to sell you the house?

Or maybe i just got the wrong end of the stick? lol

kingstreet

Lenders who won't accept incentives deduct them from the value of the property, making it worth less and making you borrow less.