Help to buy Scotland

karakala

Hello everybody :-)
With my partner we are thinking about buying new flat with help to buy. I am just worry what if bank says that we can borrow enough to cover the whole price ? and if we have enough savings to pay 10% deposit, can we pay just 5%? we would like to keep some money for furnishing the flat and rainy day.
Thank You for Your help :T

muhandis

From the Help to Buy (Scotland) Affordable New Build Schemes guidance on eligibility -

If an applicant can afford over 100% of the purchase price of a home through a combination of a mortgage and a deposit then their application will not be eligible.

Assuming this is the scheme that you are using, you might be deemed ineligible for the scheme for a particular property if the assessment shows that you can afford the property unaided. However, the devil is probably in the detail of how affordability is calculated.

From the case studies published, the rule of thumb appears to be - 3.5 times salary plus deposit should not equal or exceed 100% of the purchase price of the property, assuming no debt or other financial commitments in the background.

So, say yourself and your partner have annual incomes of £20k each, deposit of £20k, and no debt/loans, your affordability without assistance would be approx £160k. ie, you would not be eligible for HTB assistance on properties that cost up to £160k.

Hope that helps!

https://www.gov.scot/publications/help-to-buy-guidance-for-lenders-ifas/#affordability%20and%20assessment

karakala wrote: »

Hello everybody :-)
With my partner we are thinking about buying new flat with help to buy. I am just worry what if bank says that we can borrow enough to cover the whole price ? and if we have enough savings to pay 10% deposit, can we pay just 5%? we would like to keep some money for furnishing the flat and rainy day.
Thank You for Your help :T

karakala

yes, that makes sens but what if we have 20 000 savings but we don't want of course pay all our money for deposit, we need to have some money left. so let say we will pay deposit only 10 k? looks like in that case we would be eligible?

Thank You for Your time!

muhandis

I don't think that there will be the expectation that a buyer use all of their savings towards a deposit.

Only a broker or mortgage adviser would be able to give you an authoritative answer on how your circumstances fit in with the requirements of the scheme.

karakala wrote: »

yes, that makes sens but what if we have 20 000 savings but we don't want of course pay all our money for deposit, we need to have some money left. so let say we will pay deposit only 10 k? looks like in that case we would be eligible?

Thank You for Your time!