Question about a Home Buy loan 4 February at 11:44PM in Mortgages & endowments 3 replies 122 views

1122abc

In 2003, my parents took out a home buy loan of £35,000 for a £160k property with a mortgage. 

I have googled but I’m not quite understanding the loan. I also called the lender but they advised me to email them if I had queries but my emails have gone unanswered. We cannot find the initial contract that I assumed my parents had signed. 

1. Is there an end date for the loan to be repaid or is it only repaid when the property is sold?

2. The annual statement says "the amount you are required to repay when the loan comes to an end is linked to the value of your home at that time". What exactly does this mean? 

For example, if the property increased by £100,000 in value, what impact does this have on the £35,000 owed?

3. The letters also state that “you will have to pay our costs in discharging the security”. What does this mean in layman’s terms and how much is this on average?

4. Can the loan be repaid now, based on the current property value?

Thanks in advance for any replies

silvercar

Sounds like equity release. If the property has increased in value by 20% since the loan was taken out, then your parents need to pay back 20% more of the money borrowed. Are they paying interest monthly or are the interest payments also rolled up to be repaid at the end of the term. It may be that the loan is in place for as long as they own the property, though without paperwork it is difficult to tell. 

user1977

OP, as I suggested on your other thread it would probably help if you added info about the lender - from your reply there:

" it was a loan from a lender called Notting Hill Genesis who are now providing Help To Buy loans which I assume are the same thing."

JM68

If it is the Notting Hill this link should help

https://www.nhg.org.uk/residents/your-tenancy-or-lease/received-a-homebuy-loan/