Help to buy hummer after 25 years

getmore4less

ethank wrote: »

This is a good article, however most lender will expect 90% LTV or below on a new build property. We really struggled to find one. Do the numbers come out different?

The rate difference is smaller and the payment will be smaller, the margin to breakeven will be lower.

Often the problem is a combination of lack of deposit and stretched payments.

foxy-stoat

NBLondon wrote: »

Yes - it's a theoretical position for most people. But it highlights the possibility that if your circumstances change unexpectedly and you need the money so you have to sell the car then you will only be able to do so at a significant loss even if you have only driven it for a fortnight and 50 miles. Applies whether you bought it outright or on a finance deal (which has to be paid off at the original agreement price)

Yes, your point is correct for new car, new tv, new anything. However if you buy a brand new car by cash to credit and if you have to sell it if circumstances chance in an instant then perhaps buying a new car wasn't a good move. Trouble with buying a car using 100% credit, ie no significant deposit, then you have to accept that you will not be able to stop buying the finance under any circumstances, unless you accept that your credit file will be toast for at least half a decade.

NBLondon wrote: »

So for HTB.... It seems to be designed for those who do not yet have the money for a significant deposit but expect to be in a better position in 5 years time and can save up. If you are in the early stages of a career with a good expectation of moving up the ranks and salary scales then it will work as long as you do plan in that saving. If you don't have that plan (and spend all your money on avocado on toast and fancy coffee:p) or there's not a realistic chance of improving your situation then you will get the nasty shock. If your plan works - you can re-mortgage at the right time and you've had the advantage of already living in the property for 5 years rather than with your parents. If your plan goes awry (or agley if you prefer) then you will be stuck.

Yes, that is exactly why HTB loans exist, also to keep the economy going and to help house builders sell new properties. Also it aids the "renting is dead money" folk get into a property of their own. I guess if you do not understand the basics that you are deferring paying 20% of your purchase price for 5 years then you are probably one of the folk who took out an interest only mortgage 25 years and now wondering how am I going to pay for my house that you have no intentions of selling to do so.

At least they want you pay 5% in so that should be enough to cover the fees in 5 years time if you are in a position to have to sell and go back to renting.