Help To Buy equity loan question - where does the rest of my equity go?

starrybear

Hi,

I'm due to meet my IFA next week to look at a Help To Buy product.

When my current house sells (all being well), I'll have about £35k equity in my house.

For the new mortgage, I only need to put down 5% which is approx £12k. I'm also planning to wrap up as much as I can into the mortgage with regard to fees etc (approx £7k). That makes £19k.

My question is: what happens to the remaining £16k equity if it's not being put towards the deposit? Where does it go?

Thanks in advance, and happy Friday! :j

Alter_ego

It could reduce the amount of new mortgage. What would you like it to do?

starrybear

Thanks - it would be nice to have some cash to spend on new furniture!

However, if i don't do that, would it be better to put it down as a bigger deposit, or put it into savings to put towards a lump sum to eventually pay off the government loan?

I'm not sure which option would be better for us?

Thanks

Boredatwrork

It depends on the interest rates of both the mortgage and the Loan, do you have details of each?

In theory, if you wanted the money yourself, they would just send you a check of the difference. However money in the back pocket is usually where the trouble starts

Thrugelmir

starrybear wrote: »

However, if i don't do that, would it be better to put it down as a bigger deposit, or put it into savings to put towards a lump sum to eventually pay off the government loan?

I'm not sure which option would be better for us?

Larger deposit could mean a lower interest rate.

amnblog

It goes in your sky rocket.