Paying back help to buy issue...advice needed

Kat88

In 2015 we took out a help to buy loan which made up 20% of our house deposit to buy our first home. We contributed 5% so effectively our mortgage is for 75%. A year and a half down the line we are in a lucky position to be able to think about paying back 10% of the help to buy loan, so I've been investigating what it involves. Originally with the Yorkshire housing authority the loan has now been transferred to another company and none of the terms and conditions have changed. They have advised that we need to have three things one being a valuation of the house from an independent surveyor, secondly our solicitors details and finally pay an admin fee I think £200. I went back to our solicitor who helped us complete the sale of the house to ask for a quote for their services, and they were quite surprised their solicitor is at all needed. They are insisting that the solicitor transfer the money so there will be charges related to that, I can understand taking part of the charge off the deeds of the house but not why the money has to come direct from the solicitor. My solicitors advice was to think about whether it was worth paying off the help to buy loan because when it comes to 5 years we will need to either remortgage or pay off the full amount anyway. The reason that we thought about doing it early was in case house prices increased drastically but they probably are unlikely to although no one can predict that. I'm now in a position where my solicitor is suggesting that we don't go down this route apparently nobody else has done this before with them and we are thinking about whether it will be better to pay off part of the mortgage to save us the hassle. I'm intrigued really as to whether anyone else has experience of paying off part of the help to buy loan and whether it's worthwhile. I'm in a tricky position where my solicitor is saying it's really not worth it but part of me worries that if house prices increase we are going to end up paying back a lot more. Any help greatly appreciated and advice!

kingstreet

Are you sure this is a HTB Equity Loan and not a different shared equity scheme?

The post-sales HTB agent was Metropolitan which recently lost the contract to Target.

have you looked at this;-

http://www.myfirsthome.org.uk/

You are trying to repay 50% of a 20% HTB loan, meaning 10% of the current property value?

No-one can really advise you on timing repayment. No-one knows what is going to happen to property prices. Don't forget, if they fall, what you repay falls too on HTB. At 1.75% in year six, 1.87% in year seven, 2.0% in year eight (assuming 5%pa inflation) this may be cheaper than a mortgage by that time.

However, things may go differently and your property value might rocket and paying back half now turns about to be brilliant insight.

Kat88

Thank you for the reply, yes I have looked at the target website and spoken to them. It is the help to buy equity loan and I would like to pay back the 10%. My solicitor seems to be suggesting this is not common though and as we will need to either remortgage or start paying on it in year 5 it might not be worth it. I know we can't predict the future but really I was just after advice on what others have done or would do. Should I save myself a massive headache and just pay off some of the mortgage? I can't see house prices in my area of Yorkshire massively increasing but you just never know..I thought paying back 10% in advance would help in the future when it comes to Year 5 but it seems to be a complicated process...

tlc678910

Hi,
Could you keep the 10% you have saved invested and save the other 10% over the next year and a half again? Then you could pay off the full 20% in one go with your savings and will not require further borrowing if you remortgage.
Tlc