Help To Buy - should I?

Carl2510

Hello,

looking around buying a new build for around 196K now i do have enough myself to put down 20 deposit, but I was thinking if I was to put 15% and got the help to buy equity loan of the 5% remaining to get the 20% am I stupid in doing that even know the first 5 years interest free and I know I can pay that off in the 5 years that would give me some of my money available to spend on other things

does everyone think this would be a bad idea, should I just use my own money and forget any kind of loan even though 5 years is interest free.

Getting_greyer

I'm not sure that you can only use 5% from the government? 

Carl2510

I did read somewhere that you don’t have to take out the full 20% government loan.

Carl2510

Are you allowed to pay off the equity loan before the 5 years is up of the interest free.

bucksbloke

Carl2510 said:

Are you allowed to pay off the equity loan before the 5 years is up of the interest free.

You either take 10% or 20% equity loan from the government
You will repay the value of the same stake you took at the time you want to pay it back. It could be higher or lower. 
You will need a RICS Surveyor to value the property 

jimmyjammy001

https://www.telegraph.co.uk/property/buy/government-has-hooked-us-toxic-help-buy-shared-ownership-needs2/


Interesting truthful Read if you were having any doubts

Carl2510

I have been reading and well even if you want to pay it early you have to get your house valued every time and if it’s gone up you then pay more, so that 5 year interest free isn’t really free I’d only say it was free if you was allowed to pay it back before the 5 years but seems they obviously don’t want people to.

bucksbloke

Carl2510 said:

I have been reading and well even if you want to pay it early you have to get your house valued every time and if it’s gone up you then pay more, so that 5 year interest free isn’t really free I’d only say it was free if you was allowed to pay it back before the 5 years but seems they obviously don’t want people to.

It is interest free during the five years, but the government has an equity share in the property. So they will take x% of the value whether it goes up or down. It is interest free for five years, but it definitely is not free!

StephanieW

You don't have to use HTB on a new build, if you can put in 15% is it not an option to just mortgage the other 85% therefore not needing HTB at all? 

Retired_Mortgage_Adviser

StephanieW said:

You don't have to use HTB on a new build, if you can put in 15% is it not an option to just mortgage the other 85% therefore not needing HTB at all?

This. OP, in your place I'd just go ahead with an 80-85% LTV mortgage based on the funds you have.

Used right, H2B can be used to your advantage if you're using the whole 20/40% interest-free equity loan but for anything less if might not be worth the faff involved.

Sammyd159

HTB is useful if there is no other option. 
As others have said, it is not free, as you pay back % of value at time of repayment, which if values have increased, you MAY pay back more than the amount you have saved on mortgage payments.
Also factor in £400 for a RICS surveyor.
You also can't rent the property out even if you plead a change of circumstances, or make any alterations to the property without consent. 
HTB is quite restrictive, I would consider if carefully if you really don't NEED it.