Remortgage on Help to Buy

kartingmad

Hi All

So we are currently on a 2 year fixed help to buy mortgage with Skipton on a property bought for £175000.
We have a mortgage of £131250 and a H2B Equity Loan of £35000. The loan is interest free for 5 years and then we have to decide what we are going to do.

Has anyone had any experience with regards to remortgaging to pay off the equity loan after the 5 years or even earlier than that.

Ive been looking at options even though its about 4 years away yet.

The way I see it is after 5 years I think we will roughly owe £115000 on the mortgage so if we increase that by £35000 to £150000 then the LTV will be 85% meaning that there should be enough equity in the property for a company to give this money. (this is all based on the purchase price and not incorporating any value change on the house)

Any help and ideas is much appreciated

Thanks
Tom

libf

HTB only launched in April 2013 so the first lot of people on 2 year fixes are just getting to the point of remortgaging/reverting to the SVR now.

kingstreet

There are lender options for remortgages to repay the equity loan, or when the equity loan will not yet be repaid.

However, in the latter case you will require a deed of postponement from HOP the post-sales HTB Agent.

An experienced independent broker would be good first port of call for information and advice.

kartingmad

Hi

Following on from this we have received an email from Housing Option Plus who say they look after the Help to Buy after the purchase has completed.

In the guide it says if you are remortgaging to clear the loan then you do not need to let them no.

Anyone had any experience with this?

Cheers

kingstreet

You need to reach agreement with them on how much will be repayable, so that can't actually be the case;-

http://www.myfirsthome.org.uk/schemes/help-to-buy

libf

kartingmad wrote: »

Hi

Following on from this we have received an email from Housing Option Plus who say they look after the Help to Buy after the purchase has completed.

In the guide it says if you are remortgaging to clear the loan then you do not need to let them no.

Anyone had any experience with this?

Cheers

It says you don't need 'permission' for the remortgage, but you still need to contact them and send them the paperwork and fee for staircasing.

kingstreet

"you do not need to let them no" (sic) suggests no contact.

As it's necessary to have the property valued and pay the fee, letting them know appears absolutely necessary.

The difference is that there is no permission requirement in the form of a deed of postponement when the equity loan will be repaid from the remortgage proceeds.

Always one eye on future readers of the thread!

amnblog

All a bit early, why worry about paying off an interest free loan now?

kingstreet

amnblog wrote: »

All a bit early, why worry about paying off an interest free loan now?

Increasing property value?

yibiophe

In the guide it says if you are remortgaging to clear the loan then you do not need to let them no.

libf

yibiophe wrote: »

In the guide it says if you are remortgaging to clear the loan then you do not need to let them no.

You don't need to get their permission for the re-mortgage, but you do need to go through the staircasing process with them; get a valuation to ascertain market value and therefore the amount you need to pay back.