First Home Fund

Firsttimebuyer2021

Hi, I was on a few weeks ago asking for some FTB advice and received great advice however I am now back for some more...

I have seen the Scottish First Home Fund is opening again, If the bank approve us for a £180k mortgage does the £25k mean a budget of £205k now or is the £25k to be used within that £180k amount for a deposit?

I also forgot to ask I have a Student Loan plan 1 however I do not pay any back due to not earning enough, do I need to declare this on a mortgage application anywhere (Debt?) and does this also affect affordability? 

Thank you very much!

K_S

@firsttimebuyer2021 The 25k is on top of how much you can borrow. However, you also need a cash contribution to the deposit of minimum 5% of the purchase price. 

For example - house price of 216k will be made up of your cash 11k (approx), 25k government contribution and 180k mortgage.

If the student loan repayment is 0 at present and doesn't show on the payslip, generally speaking it shouldn't impact affordability.

Firsttimebuyer2021

@K_S That’s great to hear thank you! Does this also mean if we find a house at £160k we can use the £25k to bring it down to £135k and then a 5% deposit of the £135k approx £7k? 

Also do you have any advice on the student loan? 

Thank you so much! 

* Sorry I didn’t see your update for the student loan! 

Your help is greatly appreciated

K_S

@firsttimebuyer2021 160k house price will be made up of 8k (5% of purchase price) your cash, 25k govt, and 127k mortgage.

If the student loan repayment is 0 at present and doesn't show on the payslip, generally speaking it shouldn't impact affordability.

Firsttimebuyer2021

@K_S Can you correct me if I’m wrong with my maths please in this scenario...

House Price £160,000
deposit £8,000
Gov £25,000
Mortgage £127,000

How much % would the Gov then own on the house when we came to sell?

if it’s based on the £151,000 after our deposit then they would own around 16% which means if we had to sell for £180,000 we would pay back £28,800 and be left with £151,200? 

 I’m worried that by the time we pay back the money when we came to sell we won’t have any equity for the next place unless I’m totally overlooking something daft

K_S

@firsttimebuyer2021 They would own 25k/160k, so about 16% as you said. If you sold for 180k, their share would be worth ~29k. Of the 151k left, (say) 121k would go to pay off the outstanding mortgage, leaving 30k which is your equity off which all the costs related to selling costs and sheme admin costs come off of. Conservatively, that should still leave you with around 25k+ for an onward purchase deposit.

Just to be clear, the above are very very rough numbers ignoring some costs, assuming size of mortgage payments, etc