Help To Buy Application & Mortgage

wingednut

HI forumites,

I'm a first time buyer reserving a new build with Taylor Wimpey and am looking to use the Help To Buy equity loan, with another 20% cash deposit, so will be looking for a 60% mortgage. The completion window is ~10months away jan/feb '18... but TW are looking to exchange contracts in 28 days (told might/probably be extended), but just trying to get my ducks in order, so couple of questions...

TW gave me details of their recommended mortgage broker and conveyancer (no doubt there is some kind of referral fee due to change hands from this) but I'm shopping around to make sure I get the best deal anyway.
I'm looking at a 5 year fix, and barclays 1.75% looks good. However barclays, nationwide and other banks list separate Help To Buy rates which aren't as competitive (because they're based on a 75% LTV) at 2.25%....

So am I restricted to only the Help To Buy mortgage products, even though I have a LTV of 60%? (Seem to have got conflicting messages from the brokers).

One of the apparent reasons for using the recomended broker is because they can help me fill out the Help To Buy application form. I've found the form online and it doesn't look much worse than any of the forms I've done to get some agreement in principles. Can't I just fill out the form and send in myself?

The help to buy form has to be sent in with a copy of the reservation from, but the sales guy had written in the recommended broker and conveyancer, even though I'd only just agreed to reserve the property. Surely it doesn't matter to the help to buy agent if I change broker and conveyancer from the one on the reservation form?

It seems that the process for all this is:

1. Reserve Property
2. Apply for Help To Buy
3. Receive Authority To Proceed
4. Find Conveyancer
5. Exchange Contracts
6. Apply For Mortgage
7. Receive Mortgage Confirmation
8. Completion etc..

Mathias123

We are also first time buyers buying a TW home using the Help To Buy equity loan and are about to exchange.

We are well over the 28 day window and it hasn't caused us any problems, yet. The Help To Buy agents have slowed us down as for some reason they don't review all of the paperwork you send in one go. They'll send you some corrections and when you resubmit the relevant paperwork they'll find more - why they can't send a list of all corrections at once I do not know! Moral of the story is make sure the paperwork has been checked a dozen times!

We chose our own broker (never use the recommended one is a theme I've seen a lot on here).

You will be limited to lenders who can only offer Help To Buy equity loan mortgages - thinks it's about 15.

We filled in the form ourselves and sent it off along with the reservation form. Then our solicitor took over once we received authority to proceed from the Help to Buy agent.

It terms of the process your Solicitor will need to get authority to exchange from the Help To Buy agent before exchange and authority to complete from the Help To Buy agent before completion. You'll also need to apply for the mortgage and have the mortgage offer before exchange.

Hope some of the above is useful.

wingednut

Yes thanks that helps a lot. I guess you went with your own solicitor instead of the suggested conveyancer?

I'm tempted to go with their conveyancer suggestion because their "fixed" quote is so cheap and the completion window is so far away there's not going to be much rush to get anything done, and as it's their recommendation it's in both of their own interests for a smooth process otherwise they're just delaying each other from getting paid. Surely it's mostly just a form-filling exercise anyway so can't be much of a gamble? (famous last words...)

Lilla_D

I agree with most of Mathias's points - you are free to choose any broker and solicitors and the reservation form should not be forced onto you pre-filled with details of their recommended people.

The Help to Buy form can be filled out by you easily, but most brokers will be happy to help you as well, if you ask for their help.

I would only like to correct the last point above - you do NOT need a mortgage offer before you exchange. If you get a mortgage offer this month, but the completion doesn't happen until Feb18 (or later in case of a delay), your mortgage offer may well expire. You may get an extension for it, you may not. Granted, some mortgage offers for new builds are longer than the standard 6 months and lenders are normally more willing to extend them, but an offer is not a must have before exchanging contracts in the case of a new build property with completion so far in the future.

When you exchange contracts, the purchase becomes legally binding and you have to put down a deposit. Normally it's 10%, but for a Help to Buy it's normally just 5%, which I would recommend for you as well even if you have more deposit available. The mortgage is a risk factor with completion so far away (whether or not you have a mortgage offer now), so it may be wise to limit your exposure by putting down only 5% deposit now.

Re your question about rates - it is what it is, you can only choose from what lenders are prepared to offer for the Help to Buy scheme. Just for confirmation, Nationwide does offer a lower rate for 60% LTV than for 75%, but indeed Barclays just has one rate.

wingednut

Thanks Lilla. So my priority at the moment would be to get the help to buy application sent off and find a conveyancer I'm happy with?
Do you think I should ask for a new reservation form without the conveyancer and broker details filled in? Are they supposed to be on there?

Lilla_D

Yes, you'll have to find a solicitor and get the Help to Buy application sorted first. The reservation form should be corrected showing your chosen solicitor's details and if you don't have a broker yet, then that part could well be left blank.

If their solicitor has given a good quote, then you could use them of course, just make sure that when you compare solicitor quotes, you compare the details, not just the total figure at the bottom. Sometimes the "total" figure doesn't include search fees, money transfer fee, Land Registry fee, etc. while in other cases it does, which can cause a big difference in the "total" amounts.

kingstreet

FWIW the conveyancer on the Reservation and the conveyancer on the PIF (Property Information Form) have to match, otherwise the HTB Agent will knock it back for correction.

Before you start, you need a copy of the HTB Affordability Calculator. You have to enter your data on there exactly as you will enter it on the PIF and if you don't meet affordability, your HTB application will be rejected and you will have to amend it until it passes.

That means within 4.5 x income, within 45% debt to income, a minimum deposit of 5% and maximum of 55% (assuming 20% Equity Loan). It doesn't matter if your lender will lend you the amount you want. If that amount isn't considered affordable by the Government's calculator, you can't proceed.

We've been on the HTB panel since the scheme started in April 2013 and prior to that advised on HomeBuy Direct and FirstBuy the forerunners for newbuild shared equity.

Newbuild specialists have access to products not available to general brokers, such as Halifax 80% to 95% newbuild rates and we also get lender service improvements via newbuild troubleshooters at Nationwide, Santander, Virgin Money, Precise etc.

Newbuild brokers don't pay to get business from builders. We get it by offering the best quality service and faster turnaround times so the builders hit their targets and clients get their homes faster. We usually charge £250 for each case, but those buying from our panel builders pay no fee.

kingstreet

General brokers wanting help with newbuild cases should join Cherry;-

http://www.cherryplc.co.uk/forum

where I use the same username and will offer help where possible.