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QUERY: how does the equity-loan scheme in UK work?
andwan0
Posts: 35 Forumite
I have a few queries I need to clear up.
Regarding the Equity Loan scheme, it says I can borrow up to 40% of the purchase price as long as I have 5% deposit.
So if purchase price: £450,000.
I put down deposit: £22,500.
Then equity loan is £180,000.
Q1. Once this value is confirmed, then I can apply for the standard mortgage?
Q2. Can I use Lifetime (Help-To-Buy) ISA bonus in conjunction with equity loan?
Regarding the Equity Loan scheme, it says I can borrow up to 40% of the purchase price as long as I have 5% deposit.
So if purchase price: £450,000.
I put down deposit: £22,500.
Then equity loan is £180,000.
Q1. Once this value is confirmed, then I can apply for the standard mortgage?
Q2. Can I use Lifetime (Help-To-Buy) ISA bonus in conjunction with equity loan?
0
Comments
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To which HTB discounts are you referring?0
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HTB Equity Loan on a newbuild - makes no difference.
HTB ISA - only the FTB can benefit from the bonus.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Advice for a married couple, one is first-time buyer, one is not.
Well that makes things much clearer....Can one married person apply for a mortgage which includes both her salary/income + partner's salary/income? - but mortgage will be solely under her name (and not joint).
The reason is that I never knew about government's Help-To-Buy discounts until after I bought my first property.
Then I met my wife & we got married.
Now we want to move/buy a bigger home.
My wife never bought a property before. So I assume she qualifies as a first-time buyer if she took out a mortgage by herself.
However, the properties we're interested in would require both our income/salaries calculated in the mortgage. But if we take out a joint-mortgage, then we probably cannot qualify for first-time buyer government's Help-to-buy discounts.0 -
She is a FTB so she can still have a HTB ISA if she actually has savings you wish to include in the deposit in addition to your equity.
As stated, HTB Equity Loan on newbuilds it makes no difference whatsoever if you are a homemover or FTB.
As far as the mortgage goes, some lenders will give a FTB product if only one of the applicants in a couple is a FTB, while others won't.
Suggest seeking independent broker advice to establish your options.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
...and you buy a newbuild and you pass the Government and lender affordability calculatorsRegarding the Equity Loan scheme, it says I can borrow up to 40% of the purchase price as long as I have 5% deposit...So if purchase price: £450,000.
I put down deposit: £22,500.
Then equity loan is £180,000.
Q1. Once this value is confirmed, then I can apply for the standard mortgage?
No. You apply to one of the HTB Equity Loan scheme lenders for one of their HTB Equity Loan products and typically, the lender will take 3% of the equity loan as a cost in mortgage affordability.
Q2. Can I use Lifetime (Help-To-Buy) ISA bonus in conjunction with equity loan? Yes. The usual HTB ISA bonus can be used in conjunction with a newbuild purchase on HTB Equity Loan.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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