Help to buy payoff

Stressyjessie

Hello. 

My partner has recently been diagnosed with MS and as a result with have put a claim in through the critical care on our life insurance. 

The amount covers our mortgage but not the help to buy we have on our home. 

The amount is a decreasing amount so covers the outstanding mortgage we have. 

My question is, would we be better to pay off our mortgage or pay off the help to buy and use the rest to pay some of the mortgage off? 

Our fixed rate ends in Nov next year. Shall we sit on it and try and make some interest on it before then? 

Has anyone been through this? 

Thanks 

Serve_the_Servants

Stressyjessie said:

Hello. 

My partner has recently been diagnosed with MS and as a result with have put a claim in through the critical care on our life insurance. 

The amount covers our mortgage but not the help to buy we have on our home. 

The amount is a decreasing amount so covers the outstanding mortgage we have. 

My question is, would we be better to pay off our mortgage or pay off the help to buy and use the rest to pay some of the mortgage off? 

Our fixed rate ends in Nov next year. Shall we sit on it and try and make some interest on it before then? 

Has anyone been through this? 

Thanks 

Hi, so sorry to hear that you’re having to deal with that. I hope your partner gets the care and attention they need quickly. 

I would suggest considering the interest rates as the help to buy rate will be quite low and is likely to stay that way. Meanwhile your mortgage rate could end up being quite high. 

Also consider with help to buy that the house price changes can impact the capital you have to pay back. If prices increase over the next 5 years then you may end up owing quite a bit more on the help to buy. 

Take a look at what the historic house price increases have been for your area. Which county/region are you in? 

Serve_the_Servants

Like you say, might be worth knocking a proportion off each loan. What sort of house value is it? How long have you had the help to buy? How long left on your mortgage overall? 

Stressyjessie

Serve_the_Servants said:

Like you say, might be worth knocking a proportion off each loan. What sort of house value is it? How long have you had the help to buy? How long left on your mortgage overall? 

Thanks for the reply. We are in Yorkshire. 

There is currently a property for sale that is the same as ours and it’s on the market for 270k so our help to buy will be about 10% of that. We are about 3 years into the HtB. Will be 4 years come the end of our fixed term. 

Our outstanding mortgage is £170k and have about 26 years left on it when the fix ends. 

With the MS diagnosis I am not sure my partner would get another mortgage. 

kingstreet

IIRC you cannot repay the mortgage before you repay the HTB loan. There is a rule preventing the HTB second charge being promoted to a first. Ask Target.

Serve_the_Servants

Stressyjessie said:

Serve_the_Servants said:

Like you say, might be worth knocking a proportion off each loan. What sort of house value is it? How long have you had the help to buy? How long left on your mortgage overall? 

Thanks for the reply. We are in Yorkshire. 

There is currently a property for sale that is the same as ours and it’s on the market for 270k so our help to buy will be about 10% of that. We are about 3 years into the HtB. Will be 4 years come the end of our fixed term. 

Our outstanding mortgage is £170k and have about 26 years left on it when the fix ends. 

With the MS diagnosis I am not sure my partner would get another mortgage. 

Isn’t the help to buy loan normally 20% equity? Assume it’s a new build then and that you were first time buyers. How old are the two of you? Any kids involved? Might be worth running the numbers and obviously considering future earning potential and child related costs etc. considering whether you would
both be able to stay in a job for example. Really hope the critical illness pays out for you soon. 

Stressyjessie

kingstreet said:

IIRC you cannot repay the mortgage before you repay the HTB loan. There is a rule preventing the HTB second charge being promoted to a first. Ask Target.

Thanks I will look into this. 

Serve_the_Servants

Stressyjessie said:

Serve_the_Servants said:

Like you say, might be worth knocking a proportion off each loan. What sort of house value is it? How long have you had the help to buy? How long left on your mortgage overall? 

With the MS diagnosis I am not sure my partner would get another mortgage. 

What makes you think this? I didn’t think medical conditions are taken into account by lenders? Perhaps someone will correct me on that though. 

welly_59

Serve_the_Servants said:

Stressyjessie said:

Serve_the_Servants said:

Like you say, might be worth knocking a proportion off each loan. What sort of house value is it? How long have you had the help to buy? How long left on your mortgage overall? 

With the MS diagnosis I am not sure my partner would get another mortgage. 

What makes you think this? I didn’t think medical conditions are taken into account by lenders? Perhaps someone will correct me on that though. 

A very close friend of mine has been diagnosed with ms for a number of years and recently moved into new property with a mortgage no problem at all.