Help to buy question

james_uk

Hi, we bought a new build house 6 years ago with help to buy.

For the first 5 years you don't pay it back, but after the 5 years you start to pay it, although we chose to defer it so still haven't paid anything towards it.

What i was wondering was if we were to pay it in full, will it be more expensive the longer we leave it?

I think i am right that you pay 20% of the value of the house at the time? So naturally I am guessing the price of the house will only really go up, so if left for another year or 2, will just cost more to repay? Or is it capped at a certain amount, because if you were paying a bit back each month and the price of your house kept creeping up, you would never be making much of a dent in it, would you?

Can anyone tell me, if it's a bit of a pain to sort out paying it back as well? It's been mentioned you need to get a rics valuation?

At the moment the nationwide estimate of our mortgage is £268,000 which is way more than I thought, I thought it might be about £220,000 but if it is 268k then we will owe way more than we thought.

The house was bought for £184,000 6 years ago.

Can anyone advise at all?

Regards

James

ecraig

Firstly, If you paid 184k for your property, why is your mortgage for 220k/268k?

Or was the sales price really 220k, of which 20pc was htb, meaning your mortgage started as 184k?

And is the nationwide account saying they think your property is actually currently worth 268k?

Your numbers don't make sense yet.

If you took a 20pc htb loan, you have to pay back 20pc of however much it's valued by the valuer. 

If property prices were to increase by 50pc in the next 12 months you will need to pay a lot more to htb to settle your loan.

james_uk

Hi, the house price was £184,000 western we first bought it.

When I look at the figures from nationwide it just says their estimated value is now £268,000 not sure why it's that much.

I guess that could mean they are charging me a lot more that they should be. Should I try to ask them about that and how they get that figure?

Edi81

Nationwide are using a property value of £268k for LTV purposes. 

That will be based on their internal house price models.  They aren’t charging you any more. 

james_uk

Thanks, does they mean it probably will be near that value? That seems to have gone up am awful lot, which is good if cause but not great as the HTB is linked to it lol

Edi81

I think for the HTB redemption it needs a proper valuation. 

The house price indices that the lenders have can be wildly out as it’s not looking at the individual properties. 

silvercar

“ For the first 5 years you don't pay it back, but after the 5 years you start to pay it, although we chose to defer it so still haven't paid anything towards it.”

How does this work? Does the interest you would otherwise be paying get added to the loan? 

With the interest rates we have at the moment, the HTB loan attracts low interest, so worth keeping it going, especially as house prices are forecast to fall in the next year, so your HTB amount owed will fall.

To use your figures ( I expect you will need a proper valuation for HTB repayment) 20% of £184k was £36,800. But that is historical data now and lost to you from the moment you took HTB.

For the immediate future, 20% of £220k is £44k. So that is an extra £7,200. But if house prices fall 10% this year then your £220 valuation falls to £198k meaning 20% would be £39,600.

dimbo61

So let me get this correct.
6 years ago you bought a property for £184,000 and put down a deposit yourselves of 5/10% ?
You used the HTB scheme to borrow another 20% which is Interest free for the first 5 years but your now paying Interest on the loan.
You also have a mortgage with Nationwide for the rest of the property which you have been paying down for the last 6 years ( Well done )
In the mean time your home has rocketed in value and is now worth £268,000 according to Nationwide.
Have you got the money to pay off the HTB loan ?
Do you want to go to Nationwide and ask them can we borrow more money to pay off the HTB loan ?
So you will end up with a huge mortgage just as rates are going up 😪
Maybe values will reduce due to the massive rise in BOE base rates.
For many home owners and businesses  with mortgages and loans the action taken by the BOE is a complete disaster.

james_uk

Hi dimbo61, thats pretty much correct yeh.

We will have to see if nationwide's estimate is anywhere near correct.

I am going to arrange for a rics surveyor to do a valuation.

I have been in contact with one that usually charges £200 for this but has staff off at the moment, so said they will do it for £150 doing is as a walk around video call.

chanz4

halifax one was way off the rics

chanz4

james_uk said:

Hi dimbo61, thats pretty much correct yeh.

We will have to see if nationwide's estimate is anywhere near correct.

I am going to arrange for a rics surveyor to do a valuation.

I have been in contact with one that usually charges £200 for this but has staff off at the moment, so said they will do it for £150 doing is as a walk around video call.

help to buy request an inperson