Help to buy

ruperts

You need more information. Particularly how much the apartment actually costs to buy. Until you know that, I wouldn't go any further. You also need to know what terms the mortgage will be on - how many years, what rate. Then you need to know what the service charges and ground rent are now and what they will be in the future.

It might be a good deal, but it does sound like they're trying to entice you into a huge financial commitment by promising low monthly repayments without giving you the whole story. You're looking at buying an apartment here, you need to know every detail.

teddysmum

Without information you could be locked into a high interest rate mortgage , instead of one of the very low fixes.

alex_163163

Also should point out that when you decide to pay back the help to buy loan (either by moving, remortgaging) then you pay back the 20% of the value at the time. So if in 5 years your flat has increased in value then you will payback 20% of that higher value.

Cakeguts

There is something wrong with this apartment. If there wasn't the builder would not have to offer all these incentives to sell it. The builder could just put it up for sale on the open market without help to buy and sell it at the price he wants.

1 Help to buy properties are often overpriced compared to non help to buy properties. What this means is that when the property is no longer new and just any other second hand property it will only sell for the same amount as a non new non help to buy property so you are likely to make a huge loss the moment you buy it. To find out what it will be worth once someone buys it look up on Rightmove for the sold prices of similar sized flats in the same area. My guess is that the value will be about 25% lower for a second hand flat but you can check.

2 There will be something wrong with this flat because the builder is having difficulty selling it which is why they are offering all these extras.


What could be wrong with it that is putting people off buying.

a) It is very overpriced

b) It backs onto a mainline railway line

c) It backs onto the M4 or a very busy main road

d) It is in a rough area

e) It is in a flood zone

f) There is no allocated parking

g) It is more than one mile from a train station

h) You have to drive to the nearest supermarket.

j) the master bedroom is so small that you can't get a normal sized double bed without the bed being up against the wall one side and there is no room for any other furniture in the bedroom so nowhere to store your clothes.

k) There is nowhere in the flat where you can put your hoover or ironing board so they will just have to stay in the living room because the kitchen is too small and there is not enough cupboard space.

l) There is a very high service charge.


I am sure that there are more that you can think up to check.

Billian

Daltonxlouise wrote: »

Need any help possible please

Basically me and my partner went to see a new build apartment yesterday. We assumed it was rent but it turns out it's help to buy. The builder provides the 5% deposit and the government pays 20% deposit which is interest free for 5 years we pay £350 for 6 months while the mortgage is going through, once the mortgage is done the property belongs to us after 6 months and our mortgage payments stay at £350 a month. After 5 years Interest free the equity to the property should have built and they advise us to re mortgage to be able to pay off the 25,000 before the interest starts to add. Has anybody else heard of this we have so many mixed reviews it's making us doubt the whole thing

Hi, we went to see one too last week. Same company. Similar terms. Out of curiosity, where (roughly if you don't want to be specific) was yours? We put a reservation deposit down as were advised only one other apartment still available in the block. Im now wondering if its too good to be true, being mis-sold etc.
Can anyone on here she'd some light on this specific company and its genuineness? Especially with the recent issues with extortionate ground rents/leasehold in the news. Thanks

SuboJvR

It does sound genuine to me but you should be mindful, mortgage lenders especially on HTB don't like to see too much £££ in the way of incentives. Ours wouldn't accept the 5% deposit contribution you have mentioned. If they are so confident they will 'sort the mortgage' (unlikely, more likely - use their recommended broker) ask them who with and do some digging yourselves about how much incentive they accept.

Lenders usually want to see some commitment from the buyer...

Billian

Hi.
Be very careful. We did a bit more digging, and some of the claims made verbally haven't been put in writing, The promise of the mortgage staying the same as the initial rent are way off. That assumes a very low initial fixed rate period for, say two years. After that the figures rocket up to almost double what you will be told the monthly outgoings are. Then there's ground rent, service charge, maintenance charges, legal fees etc etc.

Crashy_Time

http://m.propertyweek.com/5090767.article?mobilesite=enabled


Sooner HTB is completely wound up the better IMO.

da_rule

Crashy_Time wrote: »

http://m.propertyweek.com/5090767.article?mobilesite=enabled


Sooner HTB is completely wound up the better IMO.

In theory, HTB serves a purpose. I know many people who would not have got on the property ladder without it.

Likewise though I know some people who will be financially screwed in a few years when they start to pay interest on the loan. The big issue appears to be people going into it with no plan of how, in 5 years they're going to save (up to) 40% of the value of their pproperty (or build up equivalent equity) so that they can clear the HTB loan. This is also coupled with the fact that you don't know what, in cash terms, that percentage equiates to until the day you have the property valued in order to pay off the loan.

It is especially bad when coupled with leasehold properties where you have rising ground rents and service charges. Even on new freehold properties there are the management company fees to pay, on top of the normal bills, mortgage, and trying to save to clear the loan. These management bills can also be for large sums of money and are often neglected in people's financial calculations.

Southerner3000

What happens when you look to sell a house that was purchased through HTB but is now no longer a new build so your buyer doesn't have access to the 20% loan from the government? I assume you will be selling to another FTB?