Help to Buy Query and When are Fees Due?

Ec0 · 18 July 2019 at 12:55PM

Hi All

Looking to purchase a house next year with Help to Buy (yes I know some of you on here don't support this Scheme but at present it works for me and my partner). The developments we are looking at are offering incentives such as legal fees, Stamp Duty paid etc, which would be a great help as the SDLT is about 7k for the property we are looking to buy. I have the money for deposit and extras but not the SDLT.

Query is, can these incentives be used if using HTB? I've read conflicting information online as to whether this is allowed or not? I know you can't PX your house with HTB, it is one or the other.

Also when are all the deposit, SDLT, legal fees etc. expected to be paid? My last house was very minimal on SDLT and the developers then helped with legal fees but I can't remember how early on this was paid.

Just trying to work out money currently available and what I need to save etc.

kingstreet · 18 July 2019 at 3:35PM

Some lenders accept no cash incentives on HTB, others cash incentives upto 5% of the purchase price with various stops inbetween.

Lender selection is going to depend on what's on your reservation when it lands on your broker's desk.

Funds to cover searches in solicitor's hands early on, 5% deposit in solicitor's hands for exchange of contracts. Fees, balance of any deposit and SDLT in solicitor's hands for completion.

Ec0 · 18 July 2019 at 3:46PM

Thanks for this kingstreet.

I have been reviewing lending criteria online (I know can very much be a broad view of lenders and not always followed depending on individual cases) and most HTB mortgages that I have looked at, Natwest, Barclays, Nationwide etc., all seem to accept up to 5% with some not including white goods, carpets etc. into this.

Could you advise which of the lenders don't allow such incentives?

I note that most HTB lenders clearly state cash incentives to help with the 5% deposit are not allowed, which is fine as I have this money to hand.

kingstreet · 18 July 2019 at 4:05PM

It's not necessarily the amount, it's the use/purpose.

Some will accept anything, others exclude some things, others something else.

Suggest checking the criteria at the time.

poshphil · 18 July 2019 at 4:58PM

Something else to bear in mind which I rather embarrassingly didn't realise until we were starting the mortgage process, was that HTB has different affordability criteria to mortgage lenders. I had done affordability calculators on the mortgage, and it looked like we could have borrowed a fair bit more than what we needed, but we did not meet the HTB affordability criteria and needed to borrow less to use HTB. We were fortunate that we would have been able to borrow the extra from family if needed, but in the end we chose a different property on another development.

You may well have already looked at this but is worth bearing in mind.

ethank · 18 July 2019 at 8:00PM

Ec0 - it would be good idea to speak with a mortgage broker who is used to dealing with HtB and letting them know what your needs are.

Ec0 · 20 July 2019 at 2:38PM

Hi PoshPhil,

Do you mean in reference to the gov.uk calculator for HTB affordability?
I have looked at the calculator and believe that providing sufficient deposit is available and income to debt ratio is not more than 45% there isn’t anything else looked at?
Unless I have missed something?

Ec0 · 20 July 2019 at 2:41PM

Thanks ethank, my plan is to talk to a broker in a few months.

I am just concerned at the minute as I have the deposit we need plus enough for legal fees etc. We may have enough for stamp duty providing the solicitors don’t expect to have this money at the same time as the deposit? Or do they want a big lump sum of everything (fees, deposit and SDLT) all at the same time?

ethank · 20 July 2019 at 9:23PM

Deposit needed for exchange. Stamp duty and fees needed for completion.

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Help to Buy Query and When are Fees Due?

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