First Time Buyer- joint application English + Foreign National EU

kingstreet

HSBC doesn't lend on shared equity, so will be of no help here.

You'll need to appoint a broker, or research the HTB Equity Loan lenders, then check your affordability on their online calculators. Typically they want 3% or 4% of the equity loan input as a cost, plus any ground rent or service charges taken into account.

You'll also need someone to run the Government HTB affordability calculator. I'm surprised the builder hasn't wanted this checking by their preferred advisor to ensure you are proceedable.

One high street lender will lend you £289k over 25 years assuming no dependents, an equity loan of £57,800 and no ground rent or service charges.

Thrugelmir

We have 18k deposit

In essence borrowed.

First applicant income: 8k debt on credit cards
Second: 25,000- 5k debt on credit cards

You've obviously got other funds to cover the cost of purchase costs, stamp duty etc.

So why not clear the debt and both open a Help to Buy ISA.

Strus

kingstreet wrote: »

HSBC doesn't lend on shared equity, so will be of no help here.

You'll need to appoint a broker, or research the HTB Equity Loan lenders, then check your affordability on their online calculators. Typically they want 3% or 4% of the equity loan input as a cost, plus any ground rent or service charges taken into account.

You'll also need someone to run the Government HTB affordability calculator. I'm surprised the builder hasn't wanted this checking by their preferred advisor to ensure you are proceedable.

One high street lender will lend you £289k over 25 years assuming no dependents, an equity loan of £57,800 and no ground rent or service charges.

Hi Kingstreet,

Whilst using the HTB equity loan (although called as such) you are still the owner of 100% of the property. If you were to sell government has 20% (if you have not reduced the loan amount) share in the sale price of the property.

Either that or the mortgage guarantee scheme, however with the mortgage guarantee scheme we would be asking for £280k mortgage which I though with our income might be unrealistic?

We have not got any children, service charge and land fees are not applicable and we are definitely eligible for both of the schemes (checked with the government advisor).

We are deciding on the type of the property new vs. old and benefits you get out of the government loan opposed to mortgage guarantee.

Also, the government equity loan of 57k would mean we are not paying interest on mortgage on that amount, we are looking to pay back the loan within 5 years (which is interest free). This is the reason why we wanted to go down the route of equity loan and not mortgage guarantee..

Maybe my knowledge is not sufficient enough but I thought the above was "no brainer".

By the sound of thing it will be good idea to get in touch with the mortgage brokers.

Thank you!

Strus

Thrugelmir wrote: »

In essence borrowed.



You've obviously got other funds to cover the cost of purchase costs, stamp duty etc.

So why not clear the debt and both open a Help to Buy ISA.

Yes, we have all the money to cover the legal costs and stamp duty.

Why not clear debt now? Because it will mean I am paying someone else a rent of £1000 each month, in essence someone else's mortgage.

I am comfortable to pay off my debts but was hoping to get on the property ladder couple of years earlier (12 months rent= 12k to some else) whilst 0% 8k on credit card can be gradually paid off.

Mummyto4kids

Just to say Kingstreet is a broker I think, so will know a lot about how these schemes work - certainly I had some good comments and help from him when we were looking for advice about the HTB scheme. If you look on a new build scheme I believe based on my experience that they will want their own advisor to check your eligibility for HTB - this is what they did for us. They also put us in touch with a broker who can identify the appropriate lenders - not all lenders will do HTB mortgages - we only had a choice of one because my husband was starting a new job.


Definitely look for a broker - Halifax wanted a lot of our credit card debt paid off before we complete (which we have paid off this month) and it was significantly lower than yours and our income is similar.

Thrugelmir

Strus wrote: »

Why not clear debt now? Because it will mean I am paying someone else a rent of £1000 each month, in essence someone else's mortgage.

I am comfortable to pay off my debts

This is totally irrelevant to a lender. You are using borrowed money. Which statistically increases the risk. Lenders criteria is set from board level on this basis. Saving a deposit demonstrates to a lender that an individual can manage money in a satisfactory manner.

You are entering a beauty competition. You need the lender. Lenders don't need your business.