Secured Laon with Help to buy Mortgage

hilly91

Hello again team!

Is it possible to take a secured loan against your property even though we have a Help to Buy Mortgage?

Seem a bit of an odd question, but it will help us clear some debts and pay a chunk of the equity loan off?

This is the current situation, believe we have positive equity in the house due to the increase in value?

Current Value: £240,000
Paid: £199,950
Equity Loan when purchased: £39,990 (this will now increase due to the value of the house increasing, new amount estimate: £48,000
Remaining Mortgage: £142,000

Would be looking for a secured loan of £25,000 to pay off 10% of the equity loan and clear approx 5k of debt built up..

any help would be much appreciated...

Pixie5740

To increase the mortgage or take out another loan you need permission from the Post Sales Help to Buy Agent. Further advances must be approved by the Post Sales Help to Buy Agent. https://www.helptobuy.gov.uk/equity-loan/faq/

Secure loans aren't as easy to get as they were pre-2008 (thankfully) and since you have a DMP I'm not sure how likely you are to be accepted for one, never mind one for £25k. In fact if you have a DMP which is usually because you have a history of borrowing money and not being able pay it back in line with the original T&C of the loan/credit card/whatever I'm not sure why you'd want to turn unsecured credit card debt into debt secured against your home. Fail to pay back the secured loan and a DMP won't save you, you'll lose your home.

How much interest are you currently paying on your HTB EL?

foxy-stoat

I wouldn't look to take out secured lending on a HTB mortgage.

Your LTV is just under 80% so you are at the maximum for additional borrowing already, debt consolidation may have lower LT requirements.

Just overpay as much as you can on your current debts and re-visit this in a couple of years.

simpson_77

HTB don't allow any additional lending full stop.

The only way you can circumnavigate is to take additional borrowing to clear 100% of the HTB and whatever you need on top. i.e your new mortgage will be £142k (existing) + £48k (HTB) + £5k (debts) total new mortgage £195k against property worth £240k = 81%LTV

Get it below 80% LTV and you would probably get better rates too. Most importantly you need to make sure you can afford it.

Jamesbraun

Thanks for sharing!

Have a great day