H2B equity loan redemption in full

shazk85

Hi has anyone paid their loan back in full and did you do it before you sold or when you sold and how complicated was it?

I'm trying to decide what is best way to do it that makes it as simple and stress free as possible.  I'm aware that need to pay solicitors and surveyors but I'm just worried if I wait till I move there could be delays and complications (going for new build that wont be ready till towards end of year) and that the valuation is only valid for 3 months

kingstreet

If you pay it off during a sale you pay based on the higher of the surveyor's valuation or agreed price.

If you pay it off during (eg) a remortgage, you pay based only the surveyor's valuation.

shazk85

kingstreet said:

If you pay it off during a sale you pay based on the higher of the surveyor's valuation or agreed price.

If you pay it off during (eg) a remortgage, you pay based only the surveyor's valuation.

Yeah thanks I've had quotes from surveyors and solicitors to do the work required (about £500 difference if do it now to when sell) but would then have solicitor fees to pay when do move but still thinking that will be less that if sell for higher price 

I hate making decisions lol 

dimbo61

Do you have the money to pay it off now ?
Would you need to remortgage in order to raise the money to pay off the HTB loan

Nath4n

If you have the money to redeem in full prior to sale I would highly encourage it, as it's one less headache to tackle during sale - and Target HCA are sporadically experiencing severe delays in authorisations (just google reviews) that could completely stall or even ruin a chain.

If you're able to find a valuer willing to engage in discussion on providing a 'reasonable' HtB valuation, taking into account the general stagnation in flat values in certain areas of the country (particularly London), then you can potentially make money vs doing it at sale (although obviously this is a gamble, and you'll need to take into account you'll be paying solicitors fees of £500+ that would otherwise be covered if done at sale), just make sure the valuation isn't too 'reasonable' as if it represents a decrease in value vs purchase it can disappear for months into a black hole of bureaucracy at Target HCA/Home England..

I redeemed in full and my process was:
- Engage existing Mortgage lender in final 3 months of fixed term to explore additional borrowing on new fixed 2 year rate (taking into account higher salary and overpayments on existing mortgage).
- Once tentatively approved, appoint and pay RICS surveyor for valuation.
- Appoint conveyancer / solicitor (these can vary hugely in price from £500 to over £1000 for a HtB valuation so email/ring around and get some quotes and check reviews.
- Send RICS valuation and solicitor details to Target HCA and pay redemption fee
- Once authorisation received from Target, proceed to 'completion' with Solicitor.
- Receive postal confirmation of redemption from land registry 2 months later.

There were obviously complications at each of these stages and for me it all came together rather stressfully right at the end, but I'm happy it's one less complication to tackle at sale and has a potential positive financial outcome if the ultimate sale price is higher.

shazk85

Nath4n said:

If you have the money to redeem in full prior to sale I would highly encourage it, as it's one less headache to tackle during sale - and Target HCA are sporadically experiencing severe delays in authorisations (just google reviews) that could completely stall or even ruin a chain. 

If you're able to find a valuer willing to engage in discussion on providing a 'reasonable' HtB valuation, taking into account the general stagnation in flat values in certain areas of the country (particularly London), then you can potentially make money vs doing it at sale (although obviously this is a gamble, and you'll need to take into account you'll be paying solicitors fees of £500+ that would otherwise be covered if done at sale), just make sure the valuation isn't too 'reasonable' as if it represents a decrease in value vs purchase it can disappear for months into a black hole of bureaucracy at Target HCA/Home England..

I redeemed in full and my process was:
- Engage existing Mortgage lender in final 3 months of fixed term to explore additional borrowing on new fixed 2 year rate (taking into account higher salary and overpayments on existing mortgage).
- Once tentatively approved, appoint and pay RICS surveyor for valuation.
- Appoint conveyancer / solicitor (these can vary hugely in price from £500 to over £1000 for a HtB valuation so email/ring around and get some quotes and check reviews.
- Send RICS valuation and solicitor details to Target HCA and pay redemption fee
- Once authorisation received from Target, proceed to 'completion' with Solicitor.
- Receive postal confirmation of redemption from land registry 2 months later.

There were obviously complications at each of these stages and for me it all came together rather stressfully right at the end, but I'm happy it's one less complication to tackle at sale and has a potential positive financial outcome if the ultimate sale price is higher.

Hi thanks for this I was thinking that made more sense to do it prior to save the headache, stress and delays ... its stressful enough

I have had quotes from RICS surveyor and solicitor so I know what I'm looking at cost wise, but how do I discuss surveyors providing "reasonable" valuation, surely they just do valuation?

Do you happen to know if your process to 2 months what happens if i put my property up for sale during that time or do i need to wait till done all the h2b?

shazk85

dimbo61 said:

Do you have the money to pay it off now ?
Would you need to remortgage in order to raise the money to pay off the HTB loan

No re mortgage required I just want whole sale and moving things done with as little stress and delays as possible so in my head im thinking start ball rolling wit hH2B redemption, get house up for sale (dont know if can have for sale before pay off loan..)  and pay loan back with savings not from sale of house

duckandcover

Nath4n said:

If you have the money to redeem in full prior to sale I would highly encourage it, as it's one less headache to tackle during sale - and Target HCA are sporadically experiencing severe delays in authorisations (just google reviews) that could completely stall or even ruin a chain.

If you're able to find a valuer willing to engage in discussion on providing a 'reasonable' HtB valuation, taking into account the general stagnation in flat values in certain areas of the country (particularly London), then you can potentially make money vs doing it at sale (although obviously this is a gamble, and you'll need to take into account you'll be paying solicitors fees of £500+ that would otherwise be covered if done at sale), just make sure the valuation isn't too 'reasonable' as if it represents a decrease in value vs purchase it can disappear for months into a black hole of bureaucracy at Target HCA/Home England..

I redeemed in full and my process was:
- Engage existing Mortgage lender in final 3 months of fixed term to explore additional borrowing on new fixed 2 year rate (taking into account higher salary and overpayments on existing mortgage).
- Once tentatively approved, appoint and pay RICS surveyor for valuation.
- Appoint conveyancer / solicitor (these can vary hugely in price from £500 to over £1000 for a HtB valuation so email/ring around and get some quotes and check reviews.
- Send RICS valuation and solicitor details to Target HCA and pay redemption fee
- Once authorisation received from Target, proceed to 'completion' with Solicitor.
- Receive postal confirmation of redemption from land registry 2 months later.

There were obviously complications at each of these stages and for me it all came together rather stressfully right at the end, but I'm happy it's one less complication to tackle at sale and has a potential positive financial outcome if the ultimate sale price is higher.

Thanks very much for taking the time to share your experience!
I'll be doing this in a few months' time and although I've had a pretty good understanding of the process since I first took the HTB equity loan, it's been really unclear who to engage first (i.e. mortgage lender, RICS surveyor, Target, solicitor...) - you've cleared that up for me!