HTB and shared ownership?

RealElement47

It’s so hard to work out which is the better option

HTB shared equity and you can get housing benefit for the rental part or HTB equilateral for five years then you have to pay interest on all of it.

Cakeguts

Why would you want to buy somewhere if you are claiming housing benefit. The housing benefit will only pay the rental it won't pay the mortgage on the part that you buy.

RealElement47

Cakeguts wrote: »

Why would you want to buy somewhere if you are claiming housing benefit. The housing benefit will only pay the rental it won't pay the mortgage on the part that you buy.

Changes to uc mean there is a more limited amount of housing benefit part of UC than before, it makes sense to go for shared ownership and the housing benefit will cover all of the tent part, and the interest on the mortgage is less than paying the other half of the rent.

scd3scd4

I will be more blunt..................you can not. You asked us. We gave you the answer.



My daughter purchased a flat 3 months ago. I went with her to the process!!

I think you may be missing some points. You will be evaluated. Will you be able to pay the mortgage. A flat will also come with a service charge.

RealElement47

Please correct me where I’m wrong here, I’m just trying to get my head around the new rules.

Somebody said that once you have a mortgage if you stop paying it and apply for UC then they pay the mortgage for you but then they take equity from the house for the amount they have paid until you decide to pay it back at a later date.

So it’s very similar to help to buy where the government take up to 40% equity until you pay it back.

It’s a shared risk, if house prices go up even more you lose, but if they go down you would be happy to pay back less at a later date.

The question is how long can you keep living in the house that you don’t own all the equity and what will be the interest rates down the line?

Caz3121

RealElement47 wrote: »

Somebody said that once you have a mortgage if you stop paying it and apply for UC then they pay the mortgage for you but then they take equity from the house for the amount they have paid until you decide to pay it back at a later date.

SMI is now a loan, any payments would not start until you have had 9 monthly UC payments
https://www.gov.uk/support-for-mortgage-interest
note: There’s no guarantee that you’ll get SMI for a mortgage or loan you take out

[Deleted User]

RealElement47 wrote: »

Please correct me where I’m wrong here, I’m just trying to get my head around the new rules.

Somebody said that once you have a mortgage if you stop paying it and apply for UC then they pay the mortgage for you but then they take equity from the house for the amount they have paid until you decide to pay it back at a later date.

So it’s very similar to help to buy where the government take up to 40% equity until you pay it back.

It’s a shared risk, if house prices go up even more you lose, but if they go down you would be happy to pay back less at a later date.

The question is how long can you keep living in the house that you don’t own all the equity and what will be the interest rates down the line?

Someone is speaking rubbish or you have not understood what “someone” has told you. UC will not pay your mortgage. UC might give you support towards your mortgage interest but not the capital repayment of your mortgage. Any support towards the mortgage interest via UC will be a loan, to be repaid with interest when you sell or transfer ownership of your home. Your mortgage lender would also have to accept only receiving the interest payment from you instead of capital and interest.

https://www.entitledto.co.uk/help/Support-for-mortgage-interest-Universal-Credit

It’s amazing what you can find quickly using a search engine.

ethank

Why would you want to repay a mortgage using support for mortgage interest? You end up owing even more money than you started with.

MiserlyMartin

Yes but for some strange reason housing associations require buyers of shared ownership houses to be eligible for HTB, even though they are different schemes. All this government socialism and underwriting of the housing market is doing no good at all. If something is too expensive the last thing you need is 'help' to pay for it. All it is doing is pushing up the value of the overpriced asset.

RealElement47

MiserlyMartin wrote: »

Yes but for some strange reason housing associations require buyers of shared ownership houses to be eligible for HTB, even though they are different schemes. All this government socialism and underwriting of the housing market is doing no good at all. If something is too expensive the last thing you need is 'help' to pay for it. All it is doing is pushing up the value of the overpriced asset.

The reason why housing is too expensive is because of all the help to pay for it,

Take away help to bubble and the bubble pops