Help to Buy Help!

david171

Hello!

We are in the process of buying a new build for 311,000 (33K deposit and 62K from government) using help to buy and have just had our meeting with the house buyers recommended help to buy agent.

He only recommended products from Santander, no other lender was mentioned - not even in passing or comparison - am i being skeptical in assuming this is where he makes the most commission?

I know no one has a crystal ball but would you opt for a 2.5 year (1.84% monthly repayment £700) or a 5 year fix at (2.59% monthly repayment £783),

My current job contract comes to an end in 2 years time, so Im worried about getting a good remortgage deal if Ive just got a new job - and finding a job at a similar salary/level (35K) may be easier said than done. My wife is currently on £32K but we want to start a family soon, and she doesn't want to work full time.

Also looking online myself I've found 3 better 5 year deals with Virgin (2.39% - £760 PCM), Skipton Building society (2.35% - £755 PCM) and Natwest (2.45% - £768 PCM) - How can i broach these deals with the advisor without offending. He basically said he needed our answer on the Santander deal by Monday. I was thinking of saying a friend of ours is also buying a house on a near by development and they were offered these - hence can we have them too.

Out of the 4 banks which would people prefer? The advisor was super keen on Santander as he said their retention rates at the end of the fixed term were best on the market - but at present i cant see a Help to Buy re-mortgage product being offered by Santander - would that mean incorporating the help to buy loan into the remortgage? I know at present Skipton offer HTB remortgage deals? I worry we may struggle to pass the affordability if my wife goes part time if we need to incorporate the HTB loan after 2.5 years, as we are looking to start a family asap?

All thoughts appreciated

Thanks

Barny1979

Out of interest where are you looking to buy, as £311k sounds a lot for a new build, unless it is huge?

david171

Hi its a 4 bed, 2 ensuite, detached in Newcastle and this is cheapest estate - there are 4 developments in a 5 mile radius of each other and our house style on the others would be £329K, £350K, 395K

I was shocked too at how expensive things were, after relocating from the North west. I thought it was supposed to be cheaper up north!

Barny1979

Personally I would be concerned about the affordability of a mortgage, as you have intimated, as you could very well struggle on just one salary, if it is even the same as is now.

Pixie5740

Why don't you ask the mortgage broker if the retention rates are the only reason for going for Santander? Is this broker whole if market?

david171

Thanks Barny -

We have an additional 50K in savings and both my wife and I have professional qualifications and salaries/prospects. My wife also has a permanent job with an excellent maternity package (six month full pay). So we are hopeful we should be ok and she still wants to work at least 3 days week. Plus we have both sets of parents close by for childcare.

Houses sell so quickly where we are - the development we have reserved was 90% sold out in the first 2 weeks - lowest asking price was £284.

Barny1979

david171 wrote: »

Thanks Barny -

We have an additional 50K in savings and both my wife and I have professional qualifications and salaries/prospects. My wife also has a permanent job with an excellent maternity package (six month full pay). So we are hopeful we should be ok and she still wants to work at least 3 days week. Plus we have both sets of parents close by for childcare.

Houses sell so quickly where we are - the development we have reserved was 90% sold out in the first 2 weeks - lowest asking price was £284.

Fair enough, with regards the 64k from the Government, is that paid back separately when the property sells?

david171

The advisor kept on pushing for us to have a sizeable amount of the HTB repaid before remortgaging, although he didnt expand on this. I assume as Santander dont have a help to buy remortgage product - we would have to incorporate the loan into the new remortgage if we stayed with santander and pay the government back this way.

Opening balance 216K

Closing Balance after 2.5 years deal £204,786.50
Closing Balance after 5 years deal £195,047

Therefore to incorporate HTB loan we would need a new mortgage of £268K after 2.5 years or £259K at the end of 5 years.

He recommended setting aside £200-300 a month for help to buy repayment
2.5 years - 6,000 / 9,000, respectively
5 years - 12,000 / 18, 000, respectively

So as to improve affordability if we incorporated the loan following remortgage.

Therefore if we cant pass the affordability and dont want to use savings we could always remortgage with a different lender - who offer help to buy remortgages.