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  • FIRST POST
    • MSE Tony
    • By MSE Tony 16th Mar 18, 3:11 PM
    • 73Posts
    • 22Thanks
    MSE Tony
    Help to Buy Equity Loans guide discussion
    • #1
    • 16th Mar 18, 3:11 PM
    Help to Buy Equity Loans guide discussion 16th Mar 18 at 3:11 PM
    Hi all,
    We've written a new:


    and would love your feedback.

    - How did you find the info?
    - Was it useful?
    - Suggest improvements, share your tips and whether youíve had a good or bad experience since its launch?

    Thanks for your help!

    MSE Jo
    Last edited by MSE Tony; 16-03-2018 at 3:31 PM.
Page 1
    • PaulC5
    • By PaulC5 28th Mar 18, 7:26 AM
    • 167 Posts
    • 210 Thanks
    PaulC5
    • #2
    • 28th Mar 18, 7:26 AM
    • #2
    • 28th Mar 18, 7:26 AM
    I feel your a little late to the party giving advice on this and the first sentence if false.


    "The Help to Buy equity loan scheme was launched on 1 April 2013 in a bid to help struggling first-time buyers or people finding it hard to move up the rungs of the property ladder."


    I got my first Help to Buy Equity Loan in 2011 on my first property. I now have another one having sold my first property, paying off the equity loan and buying my second property.


    At the time of selling my first property there wasn't this kind of information about but I'm now fully aware of my options and ways to save on fees in the process that I feel many are unaware of.
    • PaulMM
    • By PaulMM 28th Mar 18, 11:55 AM
    • 1 Posts
    • 0 Thanks
    PaulMM
    • #3
    • 28th Mar 18, 11:55 AM
    More details on lenders?
    • #3
    • 28th Mar 18, 11:55 AM
    Thanks for doing this MSE. Very helpful.

    I just wondered if you could provide a bit more detail on the lenders who are happy with dealing with help to buy loans (as well as those who are not, so as not to waste time with them). It's not entirely clear at the moment why those you say are most help to buy friendly are on your list (currently Halifax, Barclays, Newcastle, Skipton and Leeds) have been put there. What criteria have you used here?

    We went with another lender for a two year deal initially that finishes in Oct 18, but are looking at remortgaging options six months ahead to beat any Bank of England interest rate rise in May, so the more information on lenders happy to deal with remortgages with the help to buy component would be great.
    • dhokes
    • By dhokes 28th Mar 18, 12:41 PM
    • 184 Posts
    • 18 Thanks
    dhokes
    • #4
    • 28th Mar 18, 12:41 PM
    • #4
    • 28th Mar 18, 12:41 PM
    Has anyone done the following:

    "- Remortgage to wipe out some or all of the equity loan. This means you'll pay off the equity loan IN FULL but end up with a bigger standard mortgage."

    If so, I would be interested to know the steps required to do such a thing e.g. get a property valuation, contact your help to buy agent etc..
    • kingstreet
    • By kingstreet 28th Mar 18, 3:37 PM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    • #5
    • 28th Mar 18, 3:37 PM
    • #5
    • 28th Mar 18, 3:37 PM
    Target is the only post-sales HTB Agent and you can find your options here;-

    https://www.myfirsthome.org.uk/

    under "I want to..."
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • kingstreet
    • By kingstreet 28th Mar 18, 3:39 PM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    • #6
    • 28th Mar 18, 3:39 PM
    • #6
    • 28th Mar 18, 3:39 PM
    I feel your a little late to the party giving advice on this and the first sentence if false.


    "The Help to Buy equity loan scheme was launched on 1 April 2013 in a bid to help struggling first-time buyers or people finding it hard to move up the rungs of the property ladder."


    I got my first Help to Buy Equity Loan in 2011 on my first property. I now have another one having sold my first property, paying off the equity loan and buying my second property.


    At the time of selling my first property there wasn't this kind of information about but I'm now fully aware of my options and ways to save on fees in the process that I feel many are unaware of.
    Originally posted by PaulC5
    FirstBuy and HomeBuy Direct were the shared equity options before HTB Equity Loan which started in April 2013 as stated.

    As you can see here;-

    https://www.myfirsthome.org.uk/

    This is to assist you if you have already bought your home through Help to Buy, FirstBuy, HomeBuy Direct, First Time Buyers Initiative, Armed Forces Home Ownership Scheme, or London Wide Initiative.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • chanz4
    • By chanz4 28th Mar 18, 11:03 PM
    • 10,056 Posts
    • 2,993 Thanks
    chanz4
    • #7
    • 28th Mar 18, 11:03 PM
    • #7
    • 28th Mar 18, 11:03 PM
    £900 plus solicitors charge alone, just to pay the money and request the second charge be removed. You cant just pay the company the 20%
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
    • darroch
    • By darroch 29th Mar 18, 12:55 PM
    • 39 Posts
    • 8 Thanks
    darroch
    • #8
    • 29th Mar 18, 12:55 PM
    • #8
    • 29th Mar 18, 12:55 PM
    You should write a help to buy Scotland guide as there's hardly anything on the internet which covers more than the basics.
    • confuzzelled
    • By confuzzelled 18th May 18, 11:15 AM
    • 5 Posts
    • 2 Thanks
    confuzzelled
    • #9
    • 18th May 18, 11:15 AM
    Great help and advice
    • #9
    • 18th May 18, 11:15 AM
    I've found this guide very useful as my partner and I have have been going through the process of buying our first home using HTB Equity Loan. I thought I'd share a few other things I have found useful during the process. As I'm a numbers guy an illustration showing the relationship between house price/mortgage amount/equity/equity loan i.e. on a £200000 house on day one you'll owe £150000 mortgage and £40000 to HTB with £10000 equity but by using your mortgage calculator tool and over-payment tool you can work out what payments are needed in order to ensure that after 5 years your equity amount will cover the equity loan, I personally found this quite reassuring as we're looking at remortgaging at the end of the 0% term. We also used the Lifetime ISA or LISA to save for our deposit which we found some people didn't think was possible so some mention of that could be useful and lastly there is no mention in the guide as to when the 5 year term begins (which I believe is on completion) which was another question we raised as there was a considerable time between exchange and completion as there often is on new build properties.

    Thank you MSE for all your great advice
    • kingstreet
    • By kingstreet 18th May 18, 11:39 AM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    by using your mortgage calculator tool and over-payment tool you can work out what payments are needed in order to ensure that after 5 years your equity amount will cover the equity loan
    Originally posted by confuzzelled
    How do you take into account increases or reductions in property values which will reflect in the amount you repay?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • T2808
    • By T2808 6th Jun 18, 8:32 AM
    • 1 Posts
    • 0 Thanks
    T2808
    75% ltv?
    Recently applied to Nationwide with a 20% equity loan and a 9% deposit and was calculated as applying for a 88% LTV and declined! Absolutely crazy.... thought the benefit of the equity loan and low deposit was a reduced LTV ratio.

    If that is the case then Nationwide who welcome help to buy applications are making massive mistakes.
    • dhokes
    • By dhokes 6th Jun 18, 8:31 PM
    • 184 Posts
    • 18 Thanks
    dhokes
    Recently applied to Nationwide with a 20% equity loan and a 9% deposit and was calculated as applying for a 88% LTV and declined! Absolutely crazy.... thought the benefit of the equity loan and low deposit was a reduced LTV ratio.

    If that is the case then Nationwide who welcome help to buy applications are making massive mistakes.
    Originally posted by T2808

    Surely that would mean you need a 71% LTV mortgage? Did you apply directly or via a mortgage broker?
    • kingstreet
    • By kingstreet 6th Jun 18, 8:48 PM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    Nationwide takes the "net" purchase price after deducting the HTB equity loan. Their money, their rules...

    Other lenders don't.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • loftmonster38
    • By loftmonster38 18th Jun 18, 8:16 PM
    • 2 Posts
    • 0 Thanks
    loftmonster38
    Help to buy redemption in full
    Hi

    Really confused and upset, requested to pay off our equity loan with Target in full due to inheritance and saving really hard to find itís super complicated.

    Had to pay for RICS report then Target want £200 admin fee to get it started and also instruct a solicitor all adding up very quickly.

    get the letter from Target confirming amount they want from us but the really upsetting bit is in the letter they say on top of the 60K they want £2.60 day interest. If this is the case I feel we have been grossly miss sold as we were led to believe absolutely no interest in 1st 5 yrs of the equity loan and not told would be charged 5 yrs interest at £2.60 if did pay up before our 5yrs were up.

    Solicitor doesnít seem to be on the ball either with this which is even more upsetting as response I got when questioned this was -

    Having taken instruction on this matter the agreement you have of 5 yrs interest free means that you are not paying interest for 5yrs but the interest does accrue on the loan during that period to be repaid at a later date !!!!!! So why was this not explained at point of taking this equity loan by broker,builder or H2B? All very underhand and no paperwork from anyone saying this.

    Advise please !!!128561;
    • kingstreet
    • By kingstreet 18th Jun 18, 11:17 PM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    That sounds like an instruction to a solicitor to add £2.60 a day if the target redemption date is missed for some reason.

    It's not (AFAIK) £2.60 a day for the time you've had the loan!

    None of our clients who have redeemed HTB Equity Loans has ever mentioned this, so I suspect you have misunderstood

    From Target's current redemption pack;-

    https://www.myfirsthome.org.uk/wp-content/uploads/2016/05/CUSTINFO-Approved-04May2018.pdf

    Redemption letter

    On receipt of your loan redemption form, fee and valuation we will produce a redemption letter. This will be sent to both yourself and your solicitor. Your solicitor will also receive a guidance pack and a copy of the required form of legal undertaking to be submitted at least 15 business days prior to completion.

    The redemption letter will include your estimated repayment figure based on the valuation (please see the explanation below of how the redemption figure is reached for a sale and staircasing scenario)

    If you are redeeming through a house sale the letter will also include any arrears to be cleared and an indication of your interest payment daily rate to enable your solicitor to calculate any interest due from your last payment to your expected completion date.

    Full details will be issued to your solicitor in the guidance pack; however you must be aware of the requirement for a legal undertaking to be submitted to target 15 business days prior to any set completion date.
    You have to remember, the scheme started in April 2013 so there are people now making their first year's fee payments and this takes that into consideration. Any mortgage lender when providing a redemption statement includes a daily rate for an overshot completion.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • confuzzelled
    • By confuzzelled 16th Jul 18, 10:59 AM
    • 5 Posts
    • 2 Thanks
    confuzzelled
    Hi Kingstreet,
    The simple answer is guess work, I did a number of calcs looking at different property values and used a growth projection from Savils for one. Even the most pessimistic of views for the next 5 years only predict a stagnation of prices, and looking at what has happened in the area around where we are buying the values of new builds have been selling for more then original price 12 to 24 months on (its part of a large regeneration project spanning several years) so I looked at what I believe to be worst case and best case and figure we will be somewhere below the middle of those.

    Your right we could face a drop in house value but I consider that to be a calculated risk and relatively small given the potential rewards. I should also probably point out I'm talking about outside of London.
    • kingstreet
    • By kingstreet 16th Jul 18, 11:08 AM
    • 35,679 Posts
    • 19,521 Thanks
    kingstreet
    Buying in MK10 by any chance?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • confuzzelled
    • By confuzzelled 16th Jul 18, 11:26 AM
    • 5 Posts
    • 2 Thanks
    confuzzelled
    Not quite, a little further south. Thank you for your comment though I've spent the last 30 minis considering a drop in value which I hadn't done before.
    • CrispyUK
    • By CrispyUK 21st Jul 18, 7:33 PM
    • 218 Posts
    • 89 Thanks
    CrispyUK
    Has anyone who is now in year 6 had confirmation from Target HCA of their interest payment amounts/dates?


    I purchased using Help to Buy in June 2013 so now starting repayments, Direct Debit is set up and they've taken a payment but no idea how they've worked it out. Seems slightly iffy on the DD guarantee also if they're just taking money without providing a payment schedule.


    Had loads of letters & direct debit forms from Target but nothing specific with amounts/dates. Not managed to speak to them yet as haven't managed to stay on the phone long enough to get past the long hold queues
    • sal_III
    • By sal_III 21st Jul 18, 7:56 PM
    • 1,664 Posts
    • 1,541 Thanks
    sal_III
    I purchased using Help to Buy in June 2013 so now starting repayments, Direct Debit is set up and they've taken a payment but no idea how they've worked it out. Seems slightly iffy on the DD guarantee also if they're just taking money without providing a payment schedule.
    Originally posted by CrispyUK
    No, you are starting to pay interests on the loan, not repayments. Major difference.

    They are based on the original amount borrowed (not the repayment value of the loan which is % of the sale price). For the 6th year they are 1.75%, then increase by RPI + 1%

    For example if the RPI is 5% the interests for the 7th year will be 1.75*1.06=1.855, so 1.86%
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