Help to buy Mortgage guarantee scheme - can I do this?

MDChristie

I've spoken to a bank and an independant mortgage advisor but neither have been very clear about the help to buy scheme and whether I'm eligible or how I can use it. I recently put an offer in without using the help to buy scheme but I didn't get it as it sold for £5K above the valuation and I could afford that on top of a deposit. So, here's my details and what I'm wondering if this is possible (I'm in Scotland)...

I have £15K available as a deposit, looking to buy a place around £135K so I'd only need 13.5K.
Could I say I have only 10K available for the deposit, use the help to buy scheme to match that up to 20% (27K), then use the 5K I didn't use in the deposit to offer 140K? Or potentially even look for someplace a bit more expensive with the large deposit.

I can't say anything specific about offering more than the home report in the help to buy rules?
It seems a bit fraudulent to do it this way, but if everywhere I look is selling for ~5K above the valuation then it's not in anyway wrong to say I don't have that portion of saving available for a deposit?

stator

The mortgage guarantee scheme is simple. It's just a normal 95% mortgage. You can only borrow 95% of the agreed purchase price. The valuation must match the purchase price.
Your deposit is 5%. Your solicitor would not allow you to make any extra payments on top of that.

kingstreet

MDChristie wrote: »

Could I say I have only 10K available for the deposit, use the help to buy scheme to match that up to 20% (27K), then use the 5K I didn't use in the deposit to offer 140K? Or potentially even look for someplace a bit more expensive with the large deposit

You seem to be talking about the HTB Equity Loan scheme.

First, that's for newbuilds only.

Second, it ended in Scotland some months ago.

The remaining Help To Buy Mortgage Guarantee scheme allows you to put down upto 9.9% deposit, but you'll get a better deal on a standard 90% mortgage. There is no equity loan on the guarantee scheme.

http://www.helptobuy.org.uk/

_CC_

As said above, you're thinking about the new build loan element of HTB.

HTB on existing properties was introduced to encourage lenders to offer higher LTV mortgages, with the state guaranteeing a portion of the loan incase of a default.

To you it would be like any other high LTV mortgage, except you'd probably get better rates if just went for a vanilla mortgage.

Caz3121

Information on the Help to Buy Scotland
http://www.gov.scot/Topics/Built-Environment/Housing/BuyingSelling/help-to-buy