Sense checking Help to Buy stair casing calculations

sturgeon

I bought my flat for £395k, it was valued for £450k recently but more realistically may be £430k. I own 80% and HTB have 20%.

I put in £60k deposit, so with the 20% HTB loan taken off (£80k), minus £60k deposit, my mortgage was for £255k.

I want to remortgage to buy the 20% share, which would be worth £86k if the home is worth £430k.

I think I need a mortgage of £331k, calculated as follows:

£255k original mortgage
minus £10k paid off that
plus £86k on top to pay off HTB.

Is this correct?

What I'm also confused about is the process, it seems I need a mortgage offer first to then show to HTB. However, they do their own valuation, which could exceed the mortgage lender. Then I'd be a bit stuck!

00ec25

the HA will do their own valuation. They will inform you of what the property is worth and thus (mathematically) at what price they are willing to sell the remaining 20% to you for. You chances of disputing or negotiating down their valuation are slim.

if you are lucky then yes, you would need an increased (or new) mortgage of 331k

kingstreet

The amount you need to borrow is the redemption figure of the HTB loan plus the outstanding balance of your current mortgage.

You obtain the valuation for Target the post-sales HTB Agent before you apply for the mortgage.

https://www.myfirsthome.org.uk/iwantto/redeem/

It is possible the two surveyors come up with different figures. It may be worth trying to work out which surveyor your lender uses so you can use them for your valuation report. More chance of matching figures then.

AFF - it's not shared ownership, it's shared equity. The same terms are used, such as 'staircasing' to describe paying off the HTB loan.

sturgeon

Thanks everyone, all very clear. The best deal looks to be from Barclays but I cannot proceed with that until I get the valuation which i arrange for Target (HTB London).