Interest only mortgages with Help to Buy

Daisy_84

housebuyer143 said:

Daisy_84 said:

housebuyer143 said:

Daisy_84 said:

K_S said:

@daisy_84 Afaik, for both the 2021-2023 version and the pre-2021 version of H2B, you couldn't have an equity loan without having a repayment mortgage in place.

Thank you. I’m so confused. I’m struggling to understand why new build properties around me bought at the same time as me are suddenly scrambling to sell. I got me wondering if they had interest only mortgages.

I hope I won’t be pushed into a position of being forced to sell. I have a meeting with a mortgage advisor tomorrow who has been researching my options. My HTB loan interest kicks in June next year and fixed term also ends.

Maybe you just hit the nail on the head. HTB kicks in, in a few months as well as much higher interest rates. 

Yes, that kind of goes without saying.

The point is, why do they have to sell? Yes interest rates are rising and HTB interest kicks in, but their are options to get a new mortgage and also initial interest of help to buy is only 1.75%.

You said they are all large properties without kids. Potentially they over extended themselves and want to leave before the rates gets too much to afford.  Getting a new mortgage at 6% up from maybe 1%-2% is going to hit some people really hard, especially if you factor in the extra payments on the HTB.

Could just be a coincidence. Normally one person sells up and it gives others the same idea. You sometimes see multiple up on the same street at similar times for maybe this reason.

I see. Thanks.

I can already see from my own calculations that at 5% it’s going to take a lot out of me. 

K_S

Daisy_84 said:

K_S said:

@daisy_84 Afaik, for both the 2021-2023 version and the pre-2021 version of H2B, you couldn't have an equity loan without having a repayment mortgage in place.

Thank you. I’m so confused. I’m struggling to understand why new build properties around me bought at the same time as me are suddenly scrambling to sell. I got me wondering if they had interest only mortgages.

I hope I won’t be pushed into a position of being forced to sell. I have a meeting with a mortgage advisor tomorrow who has been researching my options. My HTB loan interest kicks in June next year and fixed term also ends.

@daisy_84 I don't mean to disregard your worries, but as long as you can afford to pay the mortgage at a 6%-ish rate, there's no reason to fear being forced to sell. If you can't remortgage (change to a new lender) due to lender affordability, then you should still have the option of doing a product-switch/rate-switch (PT) and staying with the current lender. This shouldn't involve any affordability checks, etc. In the very unlikely event that a PT isn't possible and you can't remortgage away, all that happens is you fall on to the lender SVR which is again not very far off fixed rates currently. The expectation will be that you maintain the minimum requirement monthly mortgage payment.

I've had quite a few H2B five year fixes mature their year and with H2B rates being so much lower than mortgage rates currently, the clients were mostly in a much better position than those clients with loan sizes (mortgage+equity loan in H2B cases and just the mortgage in standard cases) whose high LTV mortgage fixes were maturing during the same time.

So please don't stress too much, I'm sure your broker will also tell you much the same when you speak to them tomorrow.

Daisy_84

K_S said:

Daisy_84 said:

K_S said:

@daisy_84 Afaik, for both the 2021-2023 version and the pre-2021 version of H2B, you couldn't have an equity loan without having a repayment mortgage in place.

Thank you. I’m so confused. I’m struggling to understand why new build properties around me bought at the same time as me are suddenly scrambling to sell. I got me wondering if they had interest only mortgages.

I hope I won’t be pushed into a position of being forced to sell. I have a meeting with a mortgage advisor tomorrow who has been researching my options. My HTB loan interest kicks in June next year and fixed term also ends.

@daisy_84 I don't mean to disregard your worries, but as long as you can afford to pay the mortgage at a 6%-ish rate, there's no reason to fear being forced to sell. If you can't remortgage (change to a new lender) due to lender affordability, then you should still have the option of doing a product-switch/rate-switch (PT) and staying with the current lender. This shouldn't involve any affordability checks, etc. In the very unlikely event that a PT isn't possible and you can't remortgage away, all that happens is you fall on to the lender SVR which is again not very far off fixed rates currently. The expectation will be that you maintain the minimum requirement monthly mortgage payment.

I've had quite a few H2B five year fixes mature their year and with H2B rates being so much lower than mortgage rates currently, the clients were mostly in a much better position than those clients with loan sizes (mortgage+equity loan in H2B cases and just the mortgage in standard cases) whose high LTV mortgage fixes were maturing during the same time.

So please don't stress too much, I'm sure your broker will also tell you much the same when you speak to them tomorrow.

Thank you  

kingstreet

Martisha said:

K_S said:

@daisy_84 Afaik, for both the 2021-2023 version and the pre-2021 version of H2B, you couldn't have an equity loan without having a repayment mortgage in place.

Do you know please if in 2019 HTB was available to non FTB?

Yes. It was. It became FTB-only in 2021.

Daisy_84

K_S said:

Daisy_84 said:

K_S said:

@daisy_84 Afaik, for both the 2021-2023 version and the pre-2021 version of H2B, you couldn't have an equity loan without having a repayment mortgage in place.

Thank you. I’m so confused. I’m struggling to understand why new build properties around me bought at the same time as me are suddenly scrambling to sell. I got me wondering if they had interest only mortgages.

I hope I won’t be pushed into a position of being forced to sell. I have a meeting with a mortgage advisor tomorrow who has been researching my options. My HTB loan interest kicks in June next year and fixed term also ends.

@daisy_84 I don't mean to disregard your worries, but as long as you can afford to pay the mortgage at a 6%-ish rate, there's no reason to fear being forced to sell. If you can't remortgage (change to a new lender) due to lender affordability, then you should still have the option of doing a product-switch/rate-switch (PT) and staying with the current lender. This shouldn't involve any affordability checks, etc. In the very unlikely event that a PT isn't possible and you can't remortgage away, all that happens is you fall on to the lender SVR which is again not very far off fixed rates currently. The expectation will be that you maintain the minimum requirement monthly mortgage payment.

I've had quite a few H2B five year fixes mature their year and with H2B rates being so much lower than mortgage rates currently, the clients were mostly in a much better position than those clients with loan sizes (mortgage+equity loan in H2B cases and just the mortgage in standard cases) whose high LTV mortgage fixes were maturing during the same time.

So please don't stress too much, I'm sure your broker will also tell you much the same when you speak to them tomorrow.

My mortgage advisor said everything you have said . Thank you.

He said product switch will be an option but also we can explore what deals available next year to see if there are any that are better than the product switch. 

He said it will be better to keep the H2B loan and start paying the interest.

Come to think of it, my parents actually stayed with the same bank for two decades  and all they kept doing were product switches with that same bank. They have now retired and are mortgage free.

born_again

Daisy_84 said:

Edi81 said:

It could be a coincidence. Lots of people buying at the same time at a similar time in their lives and now they want/need larger properties. 

Most of the houses being sold are already large. It’s the ones with detached 4 and 3 bed houses that are selling. They don’t even have children. 

Fixed term mortgages? If a new builds could all be coming to a end at same time. So with interest rates are on the up. People either realise they can no longer afford, or that along with all other increases. having rooms they do not need is a waste of their cash.

Daisy_84

born_again said:

Daisy_84 said:

Edi81 said:

It could be a coincidence. Lots of people buying at the same time at a similar time in their lives and now they want/need larger properties. 

Most of the houses being sold are already large. It’s the ones with detached 4 and 3 bed houses that are selling. They don’t even have children. 

Fixed term mortgages? If a new builds could all be coming to a end at same time. So with interest rates are on the up. People either realise they can no longer afford, or that along with all other increases. having rooms they do not need is a waste of their cash.

Mine is fixed term too but looking to stay, I guess with a new deal. I take your points though.