Questions on incentives with HTB

Housessss

Hello everyone,

We have recently been approved in principle for a mortgage of £175,000 through Halifax with helps to buy. We started looking for houses over the weekend and fell in love with a new build for £185,000. I asked them if we could have it for £175,000 and they said they could give me £10000 deposit contribution instead.

I did ask if this was possible with help to buy and she said that she couldn’t see why not and we can speak to our mortgage advisor about it.

I have asked the question and I am waiting for him to get back to me but with it being a Sunday I’m guessing he is enjoying his weekend.

Has anyone else been in this situation before and can it work with help to buy ?

Thanks.

kingstreet

Incentives aren't an HTB* issue, they are a lender issue.

Halifax and TSB will only permit incentives of 1% of the PP if you are only putting down 5% deposit on HTB. You have to put down at least 9% if you want to get a full 5% in builder cash incentives.

The formula is (incentives plus mortgage amount) cannot exceed 95% of (eg 80%) equity share being purchased.

Other lenders will accept some incentives, such as legal fees and SDLT but won't allow cashbacks or mortgage incentives.

Then there are others who accept any cash incentive upto 5%.

*Cash incentives upto 5% of the purchase price are acceptable.