First time buyer - advice & help NEEDED!

Tash138

Hi All,

I would love to get your advice and opinions on my current situation. My fianc! & I are trying to buy our first home together as soon as possible but we're really unsure of what route to take, either using the Help to Buy scheme or to try and do it without.

I've never owned a property myself but my fianc! did about 20 years ago or so! My fianc! also has 4 children & I don't have any at the moment. We have £20k house deposit to put down and we are looking at buying a house of around £195k approx. Apart from buying a house we want to get married & then eventually have our own child together. Consequently with our future plans I don't want us to back ourselves into a corner so that our future plans are much harder to carry out.

We've heard differing reports about the Help to Buy scheme but being that he has dependents and that we would like to eventually get married & have a child of our own we just don't know what would be the best things to do for the future. We don't mind penny-pinching as we've been doing it for quite a few years so that we can save up the deposit, solicitors fees & stamp duty etc. but we just don't know whether the Help to Buy Scheme would be beneficial for us & whether it would help us in the long run - any opinions, experiences, advice much appreciated & welcomed.

Thanks so much in advance

ACG

Help to buy is for new builds only. So that may help you rule it uot if you are not looking at new builds.

Personally I am not a fan of it, but that is just my preference. I like the idea of knowing that I am buying and how much it will cost.

alex_163163

As ACG said, HTB is only for new builds.

I used HTB 2.5 years ago to buy a flat. It's worked out for me. Without using the 20% equity loan, I wouldn't have been able to get a mortgage for the full amount as I didn't earn enough at the time.
But I would say if you can afford it without HTB, then don't use it.
A few things to consider:
I've heard that after the initial fixed interest mortgage period (whatever you decided to take out - 2yrs/ 3yrs etc) there is a narrower pool of lenders who will remortgage with HTB. So unless you can afford to add the loan onto the mortgage at that point you won't get the option of many available mortgage rates on the market. Also if you do remortgage you have to get the permission of the HTB company to do so. They charge an admin fee to do so.

Secondly, when you do come to sell in the future there are the additional costs of buying out of the HTB. Not only do they take back 20% of the selling price (so if the house value has increased, you'll pay more back) there are fees in doing so. You will need to pay for an independent RICS valuation to provide to HTB. Mine cost £216. You also have to pay an admin fee to the HTB company to deal with it. Cost me £200.

So although I say it has worked out for me it's only because I literally couldn't have bought the flat without using it. I wouldn't use it again now I earn more and can afford a mortgage outright. So if you can afford it without the HTB that is what I would recommend. But I'm not a professional in the house/ mortgage industry so that is just my opinion.

alex_163163

Won't let me edit my post, but wanted to add I purchased the flat for £75k. Needed a mortgage for £65k but couldn't get it, so used 20% HTB to reduce mortgage to £50k.
Just wanted to clarify that I wasn't just wanting a house bigger than I needed when using HTB and couldn't afford the mortgage. I don't think I could have found a property cheaper than I did so it wasn't that I was trying to stretch myself to a 4 bed when all I really could afford was a 3 bed house. Using HTB was my only way onto the property ladder and my actual mortgage payments were far cheaper than any rent would ever have been - £197 per month.