Confused by help to buy

DoryB

Morning I'm after some advice as to what our options are.

I'm looking at purchasing a new build but are coming up short I'm confident I can secure a mortgage of 4.5 times income and we have a good deposit.

I spoke to a help to buy agent who said that help to buy only works for up to 4.5 times income which we get on a normal mortgage deal anyway.

40% deposit
50% mortgage which is 4.5 times income
But we are short the last 10%

Are there any schemes which could help us get that last 10%

kingstreet

Card debt, loan payments, HP, service charges?

All these come off your 4.5x first.

Get an experienced newbuild broker to complete the HCA's HTB Affordability Calculator and see if the proposition fits, or not.

ACG

You do not need help to buy if you have a 40% deposit.
Help to buy is not a way to allow you to buy a more expensive property than you can afford, its a way to overcome having a small deposit or open you up to other options.

Your income will only suppose a certain size mortgage - whether that be normal, help to buy, shared ownership etc etc.

kingstreet

ACG wrote: »

You do not need help to buy if you have a 40% deposit.

Minimum mortgage is 25%, allowing a 55% deposit, so the scheme's objectives may not be what you expect.

DoryB

That's what I thought but the sales woman in the new build office keeps referring us to the scheme despite me telling her it's not suitable for us. I just wanted to check I wasn't missing something.

I wanted to avoid loans, cards etc due to high interest rates.

We currently have no debts so want to keep it this way. Guess we will have to walk away then

ACG

kingstreet wrote: »

Minimum mortgage is 25%, allowing a 55% deposit, so the scheme's objectives may not be what you expect.

You learn something new every day.

DoryB

But is it not still capped at 4.5 times income anyway so it wouldn't be suitable for us.

libf

DoryB wrote: »

But is it not still capped at 4.5 times income anyway so it wouldn't be suitable for us.

You are eligible, as long as your mortgage is not for more than 4.5x income less any credit card/HP/loan debt and your deposit is less than 55%, and you don't own another property at completion.

Here is the calculator similar to that used to determine if you will be accepted:

http://www.plumlife.co.uk/Finding%20a%20Home/how_do_I_buy/Documents/help_to_buy_equity_loan_affordability_calculator_apr_2013_v3.xls

But the developer should be able to put you in touch with a mortgage broker who can check this for you.

DoryB

After some more research I think we should qualify for the equity loan of the remaining 10% still a long way to go as we were originally looking to part exchange. You can't do part exchange and help to buy together.