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    • fiisch
    • By fiisch 9th Sep 17, 2:02 PM
    • 285Posts
    • 162Thanks
    Help to Buy - Should/Could we Repay 20% Equity Share?
    • #1
    • 9th Sep 17, 2:02 PM
    Help to Buy - Should/Could we Repay 20% Equity Share? 9th Sep 17 at 2:02 PM
    We first moved into a four-bedroom house in December 2015, having bought the house the previous March for 350,000 on a 80/20% equity share (i.e.: we bought with mortgage 80% of house at 280,000, while the remaining 70,000 was on an equity share basis, at 0% interest for the first five years only).

    Since then, circumstances have changed - I have changed jobs (more than once! ), we've had a baby, and my wife is about to return to work part-time after maternity leave. Our mortgage currently stands at 252,000 on a 2-year fixed year, and is due for renewal in December, however Halifax have given the option to renew the mortgage 3-months early (which will save 90 a month in the process).

    Current high-level statement of account:

    My Salary (aged 30): 59k / year (started in January 2017 as a contractor, made permanent 01/06/2017, just off probation). Have not been paid a bonus as yet. I lose around 300 per month from my salary to student loan payments, and 5% pension AVCs.

    Wife's salary (aged 29): 9.20 / hour x 17 hours per week - roughly 7,200 per year.

    Current Mortgage: 252,000, 33 years of 35 year mortgage remaining with Halifax, 835 / month

    Car Payments: 468 + 212 / month (>2 years left to run on each)

    Loan Payment: 222.03 (will be paid off by end of the year by making overpayments, around 2,500 balance remaining)

    DFS 0% Credit Arrangement: 109 / month to run until Dec'19

    Option 1
    It was always the plan to renew the mortgage with existing provider 3 months early, which sees payments drop to 760 per month, and focus on paying off loan payment and the larger car PCP down, and then seek to pay off the 20% at the next renewal in two years time.

    Option 2
    Try to pay off the 20%. Under the terms of the help to buy, I have to get an independent valuation, which will then give us the 20% figure to pay back. Then, with the help of a solicitor, we remortgage and pay off the 20%.

    - What would you do?
    - How do I go about checking affordability? By my reckoning, before financial commitments are taken into account, we are looking to borrow 5.08x earnings (so in reality this will be higher). Is there any lender that will entertain us on such an arrangement?
    - What is the best way to go about checking into mortgages? I've used an online comparison site - Sainsbury's suggest they'd lend us 334000 with a 995 arrangement fee, but their affordability calculator shows them only agreeing to lend 80k....

    Thanks in advance for your thoughts/opinions. Although we owned our previous property, I've never switched mortgage provider / remortgaged for additional borrowing, so I'm a bit in the dark.
    Last edited by fiisch; 09-09-2017 at 2:04 PM.
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