New builds, Help to buy and Equity loan

smcnamara

Hi,

I was looking for some advice. I think I am pretty clued up on the whole first time buyers mortgages and what we can get. We both work full time, have no debits, credit cards loans etc and have excellent credit history. We both are into our 2nd Year of a help to buy ISA and are looking at purchasing in another years time. We have a mortgage in principal already just as a ball park sum. My building society (Natiowide) gave me £12500 higher mortgage which I believe is probably because I am an exciting customer so closer to the time we will probably go to another broker and see if they can come up with a better mortgage in principal.

We will be looking ideally at new builds as we have already found the ideal location which has a development site already in progress and we already have 10% of the value of the property we have seen in the brochure we like so hopefully with another 10 Months of saving in our ISA's we will have 12% and some left over for furniture. So be able to purchase form Phase 2 of the development. My question is do we use the Equity Loan on the new build? This will reduce the amount we need on a mortgage to only needing 75% which in turn will reduce our monthly payments. However we will be tied for 5 years, wont own the house in full and have to repay the loan on top of the mortgage after 5 years and if we sell give the amount back even if we sell for less than we bought etc... If we have 10% + I am not sure it would be a good idea to use it and then be tied to the Help to buy equity? also if we do use the Equity loan which knocks 20% off can we still get 85% of the price of the property on a mortgage even tho we only need 75% after using the Equity loan? hope that makes sense. The 10% difference between the 75% and 85% would go towards an extension (orangery or utility room) on the property?

Hope this all is not too confusing I think I know the answer anyways but just wondering if there was maybe some thing I had missed?

Thank you