Help to Buy

BMH1990

Hi all!
Please bear with me, as I’m a first time buyer with limited family support so am looking for some advice. I fear my question may be a bit silly so wanted to sound my question out before I speak to anyone else!!


i need to remortgage soon and want to get my ducks in a row as far in advance as possible so me and my girlfriend are not caught out! 

I took out the H2B equity loan at 20%. My house was bought in the north of UK for 280,000 and is now worth 300,000.

at time of remortgage/sale, I need to pay back 20% of the sale price (for examples sake at 300,000 this would be £60,000.)

the amount left to pay on my mortgage is approx £180,000.

my understanding is that, if the house is sold for £300,000, with £180,000 left to pay on my mortgage, that would leave me with £120,000 worth of equity?

i would like to pay the H2B 20% off at that point (£60,000). 

My question therefore is, is that £120,000 amount sat there ready to use? So would the £60,000 effectively be sat there ready to pay off the H2B? And I would then be free to use the other £60,000 as a deposit on another house if we chose to move? Or in order to ‘free’ the money up, would I have to take out a higher mortgage- so add the £60,000 onto the £180,000 I would have left to pay? Therefore meaning my new mortgage would be approx £240,000?

thanks so much in advance-I’m trying to be as prepared as possible so any advice is really helpful! 

AdrianSK

If you sell and "pay off" the mortgage then you'll be left with £120k. Then pay off £60k HTB, £60k left.