Additional borrowing to repay help to buy equity loan

megan_carys

Hi all,

I just wondered if anyone had any experience of borrowing more on their mortgage whilst in a fix?

I’m currently in year 2 of a 5 year fix and we’ve decided that it would be a good idea to borrow more on our mortgage now in order to repay our help to buy loan sooner rather than later. I just wondered if this would be mean we incur an early repayment charge?

I have rang and spoke to Halifax but in all honestly it’s left me more confused rather than being a given a simple yes or no answer :huh::huh::huh:

Any advice would be greatly appreciated,

kingstreet

No. A further advance leaves your existing mortgage product unaffected.

megan_carys

Thank you! Wish they could have answered me that simply on the phone. Much appreciated

kingstreet

Just be careful with Target, the post-sales HTB Agent. No-one has a good word to say about them (which is understandable when you think this is the outfit that bid low enough to win the Government contract to deliver the service for the next x years...)

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

Durban

Kingstreet - does the further advance mean you have to take out a new term , or will it run with the existing term left.


Thanks

kingstreet

You would have to remain in the existing term to satisfy Target if you're leaving part of the HTB loan in place.

As you are repaying the whole HTB loan you can take whatever term you want.

jaxkesa

kingstreet wrote: »

No. A further advance leaves your existing mortgage product unaffected.

Would a further advance then be on a different interest rate to the existing product?

I'm in a similar situation as the OP except I'm at the end of my current fixed deal and was planning to switch and borrow more at the same time. But my rate would go up because of the increased LTV.

My 2 options were:

1) Switch deal and leave HtB loan in place: 61% LTV @ 1.54%

2) Switch deal and borrow more (plus use some savings) to pay off HtB loan: 79% LTV - 1.74%

But could I switch to get the 1.54% rate on my current balance and then separately borrow more and only pay 1.74% on that extra amount?

There may also be 2 sets of product fees to take into account I suppose.

Lagamorph

I went through this process myself last year, and it's something of a hassle as it's all just so old fashioned.

First you need to get a surveyor to do a valuation of your house. This needs to be an RICS registered surveyor and cannot be an estate agent. Once you have the survey it is only valid for 3 months.

Then you need to get a form from Target's website, fill it in, then physically post it along with a printed copy of the surveyor's report.
Stupidly the form, and my surveyor's report, were both digital, but could not be submitted digitally. They HAD to be physically posted, even though the report was my print out, not printed by the surveyor on letter headed paper or anything.

Once you've done that Target will give you the amount you need to repay them. This will be 20% of the value the surveyor has given your home.

Once you have that figure, you need to hire a solicitor to do your conveyancing.

Then you go to your mortgage lender with how much additional borrowing you need and take it out. They will pay that money to the solicitor, who then pay it to target.

Finally, Target will confirm you're all paid off and discharge their interests on the land registry.


The whole process is ridiculously old fashioned and shows that the financial sector has never left the 19th century in some ways.

[Deleted User]

Lagamorph wrote: »

I went through this process myself last year, and it's something of a hassle as it's all just so old fashioned.

First you need to get a surveyor to do a valuation of your house. This needs to be an RICS registered surveyor and cannot be an estate agent. Once you have the survey it is only valid for 3 months.

Then you need to get a form from Target's website, fill it in, then physically post it along with a printed copy of the surveyor's report.
Stupidly the form, and my surveyor's report, were both digital, but could not be submitted digitally. They HAD to be physically posted, even though the report was my print out, not printed by the surveyor on letter headed paper or anything.

Once you've done that Target will give you the amount you need to repay them. This will be 20% of the value the surveyor has given your home.

Once you have that figure, you need to hire a solicitor to do your conveyancing.

Then you go to your mortgage lender with how much additional borrowing you need and take it out. They will pay that money to the solicitor, who then pay it to target.

Finally, Target will confirm you're all paid off and discharge their interests on the land registry.


The whole process is ridiculously old fashioned and shows that the financial sector has never left the 19th century in some ways.

Out of curiosity, which part of this is 'old fashioned' apart from putting a form in the post which isnt the end of the world

Lagamorph

Deleted_User wrote: »

Out of curiosity, which part of this is 'old fashioned' apart from putting a form in the post which isnt the end of the world

Having to phone people, send forms in the post, just being able to do virtually nothing beyond downloading the form from Target in a digital manner.

Yes it's not the end of the world, but it's just an added layer of inconvenience and completely needless. It's also extra paper and printing so for everyone doing it that's a potentially notable environmental impact in paper and ink.

[Deleted User]

Yeah i guess they could have an online portal for people with accounts to make requests which would be more modern.

But then 99% of people with these loans probably only transact on them twice in their lives. Once to set it up and once to close it down. It would be alot of hassle and cost for a full IT platform to be made that links to valuers, solicitors, and lenders. Not to mention the data protection liability that comes with that.

I would guess that this is amuch cheaper way of doing things which means the cost of the loans is cheaper as well.

If we are going to complain about old fashioned systems, lets try fix the land registry and the general conveyancing process first as that is a real joke. Ive got a case at the moment where the other sides solicitor prints emails and puts them in the post tray to work on them the next day!