Halifax Help to Buy & incentives

BigTaff

Hi

Could someone give a definitive answer please as it seems even the Halifax call centre and mortgage advisors are confused on this as I've had different answers. We are buying a house using help to buy and are applying for a mortgage with Halifax. The incentives the builder is offering us is. Flooring, turf, fencing and patio slabs - they aren't standard spec, they're extras. I thought these are non-cash/financial incentives and were either a) ok up to 5% or b) not counted at all. What I would think are cash incentives, so solicitors fees, gifted deposit, stamp duty etc I understand are only allowed up to 1% but we don't have any of these offered anyway. Problem is that Halifax have told us several different things, they've said all are cash incentives and only allowed up to 1%, they've also told us all are classed as cash and allowed up to 5% and they've told us that it's 1% cash and 5% non cash. It's ridiculous the call centre and mortgage advisors don't know their own rules.

Are there any advisors here that might have recent experience and able to shed any light please? It would be much appreciated

kingstreet

Halifax criteria;-

Builder cash incentives include but are not limited to deposit contributions, cash-backs, contribution to legal fees/stamp duty, mortgage subsidies.

Builder cash incentives will typically be acceptable provided the value of these does not exceed 5% of the lower of purchase price/valuation. Cash incentives in excess of this amount may result in a reduction in the maximum loan available. All builder cash incentives must be declared at the point of sale.

Cash incentives for shared equity applications are acceptable provided the total value of the loan plus incentive together does not exceed 95% of the value of the equity share being purchased.

Non-cash incentives are normally ignored, as you intimate.

On HTB, cash incentives can be limited, depending on the amount of deposit. If 5% deposit, cash incentives are limited to 1%. On a 10% deposit, you can have the full 5% as usual. This is because the loan plus incentives cannot exceed 95% of the 80% share.

BigTaff

Thanks Kingstreet

That is how I understood it. There seems to be a clear distinction between cash and non cash incentives even checking the CML website. What has muddied the waters is the Halifax mortgage advisors assertion that on help to buy everything is considered to be a cash incentive, which just seems plain wrong but one would assume the fellow would know his onions! Very strange, I suppose I will have to wait for the outcome of the valuation and subsequent offer while sitting quietly confident there won't be an issue given your experience and my layman's interpretation of their criteria

BigTaff

Just a quick update for anyone reading this. I can confirm having been through the process that Halifax doesn't care about non-cash incentives so fill your boots with all the flooring, turf, upgraded appliances etc you can negotiate. Just be aware of using help to buy that they have a 5% limit

kerri312

Can someone clarify whether the developer can reduce the listed property price when purchasing on HTB? The house is listed at £199k if they reduced to £190k i would get 20% EL and still put 16k deposit down....