Help to buy equity loan repayment

Thrugelmir

tezzab2016 wrote: »

don't want to sell I'm guessing repossession will happen

Be stupid to end up in that situation. They'll have no choice but to sell. Either voluntarily or be forced. The lender has the contractual rights so no court defence.

tezzab2016

Stupid is an understatement to be honest with them when I ask bout repaying the equity loan the response is oh #%*~ it - yes very stupid have instead took a further £25k debt out to buy cars the mind boggles

Thrugelmir

tezzab2016 wrote: »

Stupid is an understatement to be honest with them when I ask bout repaying the equity loan the response is oh #%*~ it - yes very stupid have instead took a further £25k debt out to buy cars the mind boggles

One day the penny will drop. That's their decision.

satchef1

You never know, they might have lucked in to the correct decision. They wouldn't be the first people to act in a financially stupid manner, only for hindsight to prove them right. If interest rates rise, the HTB Loan interest could look cheap by comparison. If house prices fall, they're only responsible for 80% of the value. Maybe they'd be content enough to downsize after 25 years?

It seems like they're being stupid. But there's no way for us to know.

It would seem sensible to remortgage. If they can't afford to do it over 20 years, then 25 or 30. Personally, when it comes to HTB, I'm looking at houses that I wouldn't​ expect to live in for more than 5 years. That way, it should be easy to deal with the loan; selling isn't something that's going to cause me distress. IMHO, buying the family/dream home on HTB is a bad idea. If, five years down the line, you can't afford to remortgage, you're going to feel compelled to pay the interest to avoid losing the house.