Help to Buy - Valuation query

AndyBeable

I have what is probably a stupid question for most.

We bought a property using the HTB scheme a few years ago for 600k. We are now trying to sell and have been advised by the estate agent that we should drop the asking price to 550k.

If we were to sell at 550k I understand the value of the government loan would be 40% of 550k, not 40% of our original purchase price of 600k.

My question is, I assuming we would have to make up any shortfall in the 60% mortgage for the 50k? 

Thanks

CSI_Yorkshire

When you sell you will need to pay off all of the debt, whatever that happens to be.

If the sales price isn't enough for this, you will need to make up the difference.

kingstreet

If you bought for £600,000 you had an equity loan of £240,000 and your mortgage could not have been more than £330,000 assuming you put down the minimum 5% deposit.

If you sell for £550,000 you will repay the HTB loan, now £220,000, and the mortgage which should have fallen to around £313,000 (assuming three years of a forty year term have passed at a rate of 2% pa. leaving you with a small amount of equity.

You need to substitute your mortgage balance where my estimated mortgage balance is entered to work out the real figures.

maveli

HTB repayment is depends on RICS surveyor valuation, not estate agent valuation. The former's valuation is typically more than estate agent valuation

kingstreet

maveli said:

HTB repayment is depends on RICS surveyor valuation, not estate agent valuation. The former's valuation is typically more than estate agent valuation

IME surveyors typically value at less than EAs. On a sale, the redemption is based on the higher of surveyor valuation and agreed price.