Help To Buy Mortgage "Service Fee"

SteveMelrose

Hi there,

My wife and I are looking to buy our first home, and we're hoping to do this using a "Help To Buy" equity loan mortgage for a new build.

We had a meeting with an independent mortgage advisor last night for the first time, and during the meeting the topic of a "service fee" for the equity loan came up. He stated this fee was £99/month!

We were quite taken aback by this. Ignoring the fact this is a lot of money per month and even more over time, this was the first time we'd heard of this fee despite doing a lot of research into Help To Buy before hand. And even with subsequent searches after the meeting, I couldn't find a reference.

I did some more looking this morning and finally found reference to a "service fee", but this one is £1/month, which is far more reasonable and expected.

I just wondered if anyone else had come across this "service fee" and what amount they were paying?

To be clear, I'm not taking about a service fee to a management company. This has already been stated separately, and again is a far more reasonable amount.

Thanks!

kingstreet

It's £1 a month payable to Target.

The direct debit is part of the property information form (PIF) which confirms the fee.

SteveMelrose

Any idea where £99/month came from then? I'll reply with what he says as and when as I've asked him too.

kingstreet

From the current PIF;-

DIRECT DEBIT FORM: Please complete, sign and return the attached Direct Debit Form. This is to authorise your bank to debit the monthly fees which will fall due under the Equity Mortgage (which will be £1 per month for the first 5 years of the Equity Mortgage). We confirm that the Direct Debit form will only be used in the event that you purchase the Property and enter into an Equity Mortgage with the Agency.

SteveMelrose

To finally clarify, this was a massive miscommunication between ourselves and our mortgage adviser.

The £99/month direct debit is the base interest for our equity loan and doesn't start until year 6 of our mortgage, which makes complete sense!

Thanks for the replies!