Help to Buy mortgages - help please

[Vocal Minority]

Morning all

I have done a bit of reading, but I fear I know the answer to this one already.

I have recently joined the mass pile of PH divorcees. I have been bought out of the house by my ex wife and have £17,500 in my pocket from my share.

Even though I do not have an interest in any property any more - I don't qualify for any help to buy product do I, as I am not a first time buyer?

[illmonkey]

There are several different versions of help to buy, for you, it's probably best to look at 'Equity Loan'. Basically you can put as little as 5% down, they'll make up to 25% as a deposit, giving you a mortgage of 75%, so the good deals are within your reach. But, you must buy a new home.



The other schemes are for 'first time buyers', which you are not.

https://www.helptobuy.gov.uk/equity-loan/equity-lo...

[Vocal Minority]

cheers illmonkey - that's helpful

[16v stretch]

Equity Loan PDF said:

For Help to Buy in England, not London, you must take out a first mortgage
(with a qualifying lending institution e.g. a bank or building society) for at least
25% of the value of the property you wish to purchase. This mortgage,
together with any cash contribution from you, must be a minimum of 80% of
the full purchase price. The maximum full purchase price is £600,000.

It specifies that it must be your first mortgage, so chances are you may well be ineligible too.

For information about the equity loans as an FYI if you are eligible.

The interest you pay is based on the RPI rate(+1%), rather than the base rate, so you pay a lot more in interest than you might think. Depending on how brexit goes, the RPI rate could well creep up as well.

Also, from the way it's worded, if you want to pay it off early, you have to pay a minimum of 10% of your homes current value, and if the property value has gone up, you'll pay more to pay off the loan.

[illmonkey]

I think the wording in that means only 1 mortgage as in first, rather then first ever.


I've found several places saying this:

Yes, the Help to Buy equity loan is available to both first time buyers and existing homeowners. You will need to sell your existing property when you buy through Help to Buy. Your new home must be your principal residence and you cannot keep your old property and rent it out.

https://www.helptobuymidlands.co.uk/faqs-help-to-b...

[ManicMunky]

Don't do it!

[Vocal Minority]

I appreciate that some sort of sinking fund or provision for paying off the government loan aspect ASAP is important.

It's all a relatively simple spreadsheet away from an informed decision on this v a 95% mortgage.

Edited by Vocal Minority on Tuesday 21st November 13:20

[mangos]

ManicMunky said:

Don't do it!

Agree with Manic

[Vocal Minority]

Out of interest - why is that?

Say I had a plan to pay off the governments ownership within the five years?

[PDP76]

I wouldn’t be keen, that’s down to my own circumstances though, as always it’s your budget that’s the key with this.

I could be facing a future similar to you op. But in my case we’ve agreed that should we not work things out the house will be sold, debt cleared and walk away.
I’d still like to keep it at 7 yrs mortgage so my budget and outlook is massively reduced going forward on my own if this is what’s going to happen.

For example






When this one says character, it’s estate agent speak for it’s a bit ropey lol

[Vocal Minority]

The top one is a sweet little house. Like that,

On the basis I still had quite a bit of a mortgage in front of me, that didn't bother me too much - unfortunately not too much in that price band where I am potentially relocating to (career considerations)

[PDP76]

The prices round here are still all over the place, some of it makes no sense. There is some terrible property in that price range.
Small ex mining town in derbyshire.
Brand new with help to buy, considering my budget to mortgage term is out of reach. At 41 I really don’t want to extend the repayment years.
My plan was to be mortgage free before 50, I’ll try and keep it like that.

The first property is sweet, really well done refurbishment. It shouldn’t be on long.
Good luck with your house hunting.

[ManicMunky]

mangos said:

ManicMunky said:

Don't do it!

Agree with Manic

Vocal Minority said:

Out of interest - why is that?

Say I had a plan to pay off the governments ownership within the five years?

We had an absolute nightmare when we sold, in getting the equity loan paid off. It's the exact same process to finish it whether you sell it or you want to give them the cash.

You need a valuation survey which only lasts 6 weeks (so if the process stumbles at some point, you'll have to start again), then the knuckle-dragging simpletons at whatever agency they're using this week (currently Target, who threatened me with court for non-payment of interest on the loan, 6 months after I'd settled it) need to approve it, then you need to instruct a solicitor to do the paperwork, then Target need to do some more paperwork, then your solicitor pays them, and you wait up to 12 weeks for the paperwork to come back saying your account is cleared and they have no interest in the property, and then the charge on the deeds gets removed.