HTB Equity loan Q
Discussion
I know its going to be an unpopular opinion on here as a way of financing but need to ask a question to anyone that maybe out the 5 year period or anyone that knows about HTB.
Situation is that with 3 kids and 3 bedrooms I could do with a move, Kids currently 6,5 and 2. Obviously 3rd was not planned!!
Anyway, put our house on the market to sell and first time buyers purchased it for pretty much asking (£245k), we want to stay in the village as kids go to the local school and we don't want to risk moving outside of catchment, issue with that is all the 4 beds are approx £320k to £350k, they need tidying up etc and some need kitchens / bathrooms updating, however there is a new build site that has lost a reservation last minute, it needs to be completed by March 27th, my buyers are happy with that but I cant straight mortgage that much as the house is £375k.
They have offered £12k of "money" to spend how we wish with any extras or going into the stamp duty pot, all good so far as the extras would mean I could have flooring, carpets, lawn etc. so ready to move in and contribution to stamp duty etc.
Issue is the 14% loan needed (circa £50k). I'm putting £75k from my sale and mortgaging the rest.
All affordable now (obviously stretch) but hopefully wont need any money spending on it for a good few years, issue is I cant work out if I was unable to pay the loan off by lending in 5 years how much my payments would be on the equity but, calculators tend to do the 1st year (year 6) but not the rest.
Logic at looking at HTB and new build is that although I earn decent money (ish) the wife works part time and we don't have much spare money as such after the bills, the move means and increase of around £220 per month weather we move to new build or just the next step up with no HTB. (new build reduces the unexpected maintenance/improvement spend but increases the what the hell do we do in 5 years bill!)
Situation is that with 3 kids and 3 bedrooms I could do with a move, Kids currently 6,5 and 2. Obviously 3rd was not planned!!
Anyway, put our house on the market to sell and first time buyers purchased it for pretty much asking (£245k), we want to stay in the village as kids go to the local school and we don't want to risk moving outside of catchment, issue with that is all the 4 beds are approx £320k to £350k, they need tidying up etc and some need kitchens / bathrooms updating, however there is a new build site that has lost a reservation last minute, it needs to be completed by March 27th, my buyers are happy with that but I cant straight mortgage that much as the house is £375k.
They have offered £12k of "money" to spend how we wish with any extras or going into the stamp duty pot, all good so far as the extras would mean I could have flooring, carpets, lawn etc. so ready to move in and contribution to stamp duty etc.
Issue is the 14% loan needed (circa £50k). I'm putting £75k from my sale and mortgaging the rest.
All affordable now (obviously stretch) but hopefully wont need any money spending on it for a good few years, issue is I cant work out if I was unable to pay the loan off by lending in 5 years how much my payments would be on the equity but, calculators tend to do the 1st year (year 6) but not the rest.
Logic at looking at HTB and new build is that although I earn decent money (ish) the wife works part time and we don't have much spare money as such after the bills, the move means and increase of around £220 per month weather we move to new build or just the next step up with no HTB. (new build reduces the unexpected maintenance/improvement spend but increases the what the hell do we do in 5 years bill!)
JPJPJP said:
Would you even qualify for help to buy?
Yes, I believe until next year, then its only first time buyers. i think it was to prop up the housing market a few years back, on the lower price advice they can only give certain incentives on HTB, reducing the price apparently make the HTB unavailable, they can only offer non removable upgrades or contribution to stamp dutySarnie said:
"calculators tend to do the 1st year (year 6) but not the rest."
Whats the rest? The payments in year 6 would be the same in year 7, 8 9,10 etc etc.......
I thought it rose every year, a little more googling suggest..Whats the rest? The payments in year 6 would be the same in year 7, 8 9,10 etc etc.......
"you pay no interest on the equity loan for 5 years. In year 6, the interest rate will be 1.75%. Every year after that, it increases in line with inflation plus 1%." but then gives example of:"
Year 6: 1.75%
Year 7: 1.82%
Year 8: 1.89%
To me that doesn't look like a 1% increase unless I've really miss understood it..
jonwm said:
I thought it rose every year, a little more googling suggest..
"you pay no interest on the equity loan for 5 years. In year 6, the interest rate will be 1.75%. Every year after that, it increases in line with inflation plus 1%." but then gives example of:"
Year 6: 1.75%
Year 7: 1.82%
Year 8: 1.89%
To me that doesn't look like a 1% increase unless I've really miss understood it..
It doesn't increase by 1% each year........"you pay no interest on the equity loan for 5 years. In year 6, the interest rate will be 1.75%. Every year after that, it increases in line with inflation plus 1%." but then gives example of:"
Year 6: 1.75%
Year 7: 1.82%
Year 8: 1.89%
To me that doesn't look like a 1% increase unless I've really miss understood it..
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