Help to Buy - Weighing up my options

SuboJvR

Lu_Lu wrote: »

I am not sure if this will help, but sharing our experience in case it does.

We bought our house in 2015 using HTB and borrowed 20% of the house value. Our intention was to either staircase (pay half off) or to wait for the 5 years to be up and then pay it off.

We worked out that, after 5 years we would be able to add extra to the mortgage and then use savings to top up the rest. To be fair we did start out with a little pot of money left from selling our old house but also were saving around £300 per month for this.

Fast forward to May when we met with our broker about remortgaging and his advice was not to staircase as there are so many fees to pay it can be quite an expensive business doing that twice. He advised to get another mortgage for as much as we can and then use some of our savings to top up the HTB loan and pay it off now. I never thought we would be in a position to get rid of it after 2 years so very happy.

We have our mortgage offer and the house has been valued at a little less than we paid so we've saved a few hundred pounds there but now don't have the worry of it being worth so much more in a few years and owing them more!

We've got almost all the paperwork in place, just waiting for a completion date and then we'll be done. We got a much better mortgage rate so our payments are going up £100 a month but now we don't have to keep saving the £300 per month and we're going to end up with a good chunk of our savings left.

I think you need a plan for paying it off but look at doing this as soon as you can and use a specialist broker who can get you access to the good deals, advise on affordability for larger mortgages and can do all the work for you.

Good Luck!

Great feedback - thanks for posting Lu Lu!

Lu_Lu

dhokes wrote: »

1. I don't suppose you've got an approx. breakdown of the fees you've paid to pay off the equity loan?

2. Did you use a national mortgage broker? If so, I don't suppose you can share the name.

We have paid a broker fee and £397 independent valuation fee plus the £200 redemption fee to the help to buy people. We are also using the solicitor recommended by the broker and that's going to cost £400ish.

The broker is the same one we used to get the mortgage in the first place. It's RSC new homes. Can't fault them, gave good advice and helped us weigh up our options and they have done all the chasing and work so far. They respond to emails within the hour also.

goodwithsaving

dh058977 wrote: »

Yes thank you, lots of good information I'm just always worried I have missed something!!

We have a plan in place to over pay on our mortgage so hopefully once our fixed rate is up we will have enough equity in the property to remortgage inc the full equity loan.

This assumes a house price rise when the market has stagnated, falling in areas. Overpay the mortgage and build a cash reserve.

dh058977

goodwithsaving wrote: »

This assumes a house price rise when the market has stagnated, falling in areas. Overpay the mortgage and build a cash reserve.

Overpaying on the mortgage doesn't assume a rise or fall actually, it is just paying more than the set monthly payment.