Forces Help to Buy Question

Medihv

Good morning all,

I know that this may be a bit of a niche question, but rather hoping that someone may know the answer.

Looking at a property will a value of £200,000

Have a MAX deposit of £40k

As a sole applicant on £34k a year salary, I seem to be able to borrow £150k.

This obviously leaves me £10k short. However I do have the option of using the FHTB scheme, which enables me to borrow up to 50% of my salary interest free.

And finally to the question... Does this borrowing count as a loan? If I applied for a FHTB payment of £10k, would this then lower my potential mortgage borrowing by £10k?

Thanks in advance for any help you are able to give.

[Deleted User]

Here is the wording from Barclays:

Service personnel may be offered a Forces Help To Buy Loan (FHTB), which replaces the Long Service Advance of Pay (LSAP). This is usually a 10-year interest-free loan of up to £25,000. This may be used as a deposit to purchase a property but should be treated as a loan commitment in the normal way with the monthly payments being deducted from the applicant’s income.

The sourcing of the deposit in this way must be declared in the mortgage submission, and advisors or underwriters may ask the applicant to provide the ‘Personal Information Note’, which will contain details of their loan.


I wont check everyone else but id be 99.9% confident that they will all treat is as a loan.


It may not reduce your affordability though, depending on the lender some have a decent tolerance for borrowing before it starts to show on the affordability. The income multiples are a cap, not a calculation so they may actually lend you more than the income multiples but cant do so due to the cap. By adding some borrowing it might still be above the cap so you wont see the change in affordability.

Also, some lenders go to 4.49x income and some go to 5x income. Some big high street lenders only go to 4x. There may still be an option out there for you

[Deleted User]

There are quite a few lenders doing 4.75x income which would be just about enough for your purchase (make sure you factor in fees). 4.75 x £34000 = £161,500
Do you have any credit commitments or student loans?

Who gave you the £150k figure?

Medihv

Hello Deleted_User,

Thanks for the help,

The £150k figure was purely from googling "how much can I borrow" and filling out some basic (non AIP) questions online from high street lenders.

No student loan and will have no fixed outgoings by the time I am ready to purchase.

[Deleted User]

Medihv wrote: »

Hello Deleted_User,

Thanks for the help,

The £150k figure was purely from googling "how much can I borrow" and filling out some basic (non AIP) questions online from high street lenders.

No student loan and will have no fixed outgoings by the time I am ready to purchase.

Without going in to too much details as im not allowed on here, if you have more than 10% deposit and no credit commitments there is a large high street lender who will do 4.75x gross income all day long.

Seek out a broker to see if you can do it on your numbers without the loan