Natwest put a cap on HTB Equity Loan

Giddykipher

Thought I'd just start this as a new thread because it's information I didn't know about and may well affect other peoples decision in using Natwest.

I am buying a new build property and want to use the HTB Equity Loan. I have 15% deposit to add to the mix so effectively am looking for 65% LTV on a £270k property. Natwest will only allow you to put a further 5% deposit on top of the equity loan ie: 25% in total. This has totally screwed me up because even though they will lend me what I need and I have the funds, I can't get the house because they won't allow me to put a big enough deposit down.

Funnily enough their website states you need to put in AT LEAST 5% deposit which is highly misleading. Apparently it's their own internal policy and they can do what they like :mad:

Thrugelmir

Giddykipher wrote: »

Thought I'd just start this as a new thread because it's information I didn't know about and may well affect other peoples decision in using Natwest.

I am buying a new build property and want to use the HTB Equity Loan. I have 15% deposit to add to the mix so effectively am looking for 65% LTV on a £270k property. Natwest will only allow you to put a further 5% deposit on top of the equity loan ie: 25% in total. This has totally screwed me up because even though they will lend me what I need and I have the funds, I can't get the house because they won't allow me to put a big enough deposit down.

Funnily enough their website states you need to put in AT LEAST 5% deposit which is highly misleading. Apparently it's their own internal policy and they can do what they like :mad:

Unclear how you are arriving at the LTV. 15% +65% = 80% ?

Giddykipher

Thrugelmir wrote: »

Unclear how you are arriving at the LTV. 15% +65% = 80% ?

The Government HTB Equity Loan is 20%, add that to my 15% and I only need 65% from the bank.

Thrugelmir

LTV as far as the lender is concerned is still 85%. Affordability rules are aren't changed.

Giddykipher

Natwest have their own internal policy. In the case of HTB Equity Loans, they will only allow you to contribute 5% of your own money and 20% of the Government Loan. I know it sounds crazy but trust me, I have rung them so many times to clarify and been told the same. They will not allow me to put more of my own money in. They want a higher stake in the property.

Thrugelmir

Why can't you get a standard mortgage at 85% LTV?

Giddykipher

I can but it wouldn't give me enough equity to buy the house I want......I don't earn enough to get a mortgage for 85% of the value of this particular plot.

I will go elsewhere but I thought it might be useful info for other people to know.

Thrugelmir

Giddykipher wrote: »

I can but it wouldn't give me enough equity to buy the house I want......I don't earn enough to get a mortgage for 85% of the value of this particular plot.

Which goes to back to my previous point about affordability. Your LTV isn't 65%. The HTB scheme isn't a way of borrowing more money. It's intentionally targeted at people with low deposits. In order to get them onto the property ladder. Perhaps they are currently renting.

Giddykipher

In my opinion, it's the mortgage guarantee scheme is for that, for people who have a smaller deposit. The Equity Loan is more for people wishing to move but are unable to get on the next ladder due to the excessive houses prices, it makes moving accessible for everyone.

The more I use this site, the more I find it judgemental and hypocritical. I posted just as a piece of information to help others and then find that I have to defend why I would possibly want to borrow less money from a bank but better my family home!

My original point is that the Government started the HTB equity loan for everyone, providing they have a MINIMUM of 5% deposit, not a maximum. Natwest advertise the same on their site but then have their own internal policy which means they use the 5% as a maximum. I didn't want to open up a huge debate about my own personal finances.

brit1234

Giddykipher wrote: »

The Equity Loan is more for people wishing to move but are unable to get on the next ladder due to the excessive houses prices, it makes moving accessible for everyone.

House prices would be even more excessive if the banks let you do what you want to do, making the situation even worse.

Just keep saving a bigger deposit, house prices are more likely to fall than rise and you will be another step closer to home ownership.

Thrugelmir

Giddykipher wrote: »

The more I use this site, the more I find it judgemental and hypocritical. I posted just as a piece of information to help others and then find that I have to defend why I would possibly want to borrow less money from a bank but better my family home!

Facts are facts. Nothing judgemental or hypocritical in my comments. Ranting won't change the situation.