HTB Redemption Process Query

shaggyuk

Hi All,

We are into 2nd year of our HTB equity loan & our current fixed rate mortgage expires in end of October this year. So now we are looking to apply for HTB redemption by re-mortgaging (additional borrowing from lender to pay off government equity loan). If I understand the process correctly - we need to get our property valuation done through RICS approved surveyor, instruct solicitor for conveyancing and apply for re-mortgage with current lender (Barclays) or another whoever offers better rates.

Now my questions are -

1) Considering we are about 9 months away from current rate expiry when do you think is the ideal time to start the process and what should be the order if that matters?

2) Will there be any advantage of staying with Barclays if they are okay to lend us more or simply to go with anyone offering the cheapest rate?

3) At the time of purchase we had put down 10% deposit and taken 15% HTB equity loan and 75% LTV mortgage. With the help of some savings made and mortgage regular monthly payment, we are looking to increase our equity to 15% so we can aim for 85% LTV remortgage rates. Can you explain how to handle to combination of single over payment (to achieve 85% LTV) along with additional borrowing from lender to pay off govt equity loan?

4) I understand RICS valuation is valid for 3 months time so apparently that is the time frame we need to aim for however what bits of overall process should be completed in 3 months is my other confusion.

Any inputs would be appreciated.

Thanks in advance

rfeenie

You would probably want to do this 1 or 2 months before your current deal is up, you will probably have a high Early Redemption Penalty to get out the fixed early so be best going for the new mortgage the day after the current one expires.

Paying off the HTB equity loan will allow you to browse the whole market for the best deal on your new mortgage, if you were still on HTB your new mortgage options are limited to the banks that support HTB, some banks supporting HTB have higher % rates than if you were not on HTB so clearing that will give you more options for sure.

Regarding getting your LTV to 85% on new mortgage you might not even need to pump in more money for that, you will get a new valuation done anyway to get out of HTB so could well see your property price has increased sufficiently to have improved your equity, failing that it should be easy enough to pay £xxxx at re-mortgage time to get the LTV rate you want.

marin_mayhem

I would look at this at least 4 months ahead.
There is always some issue with the legals

google myfirsthome and you should find the HTB scheme info for post completion stuff. Staircasing. redemption etc
I can't paste a link!

Re-mortgage offer is commonly valid for 6 months.
So either look at the best option from current lender or the wider market