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Help to buy advise

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Posted 7th Nov
Need more info regarding this.
5% deposit, government gives 50% interest free loan for 5 year and 45% mortgage.
What happened after 5 year ?
Can I remortgage for whole amount after 5 year.
Earning around 30k yearly. What Can I afford ?
Thanks
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i probably would stay away from H2B
money.co.uk/gui…htm

1. you are limited to new builds.
2. new builds are often small and expensive
3. there were some stories that developers were hiking the prices for people using help to buy
4. not sure about remortgaging the H2B but i know you will have 2 loans to pay off after 5 years
5. use the affordability calculators on pages like MSE.... normally its around 3-4x your annual earnings
Edited by: "mtsk" 7th Nov
As above i would stay away from help to buy. Maybe speak with a Mortgage adviser and see what options you have and what you can afford. A lot will do a free no obligation appointment to see what they can do for you and then you pay there fee when you do the application.
toddyj998707/11/2019 11:28

As above i would stay away from help to buy. Maybe speak with a Mortgage …As above i would stay away from help to buy. Maybe speak with a Mortgage adviser and see what options you have and what you can afford. A lot will do a free no obligation appointment to see what they can do for you and then you pay there fee when you do the application.


london and country are a mortgage broker with no fees whatsoever as far as I know
mtsk07/11/2019 10:36

i probably would stay away from …i probably would stay away from H2Bhttps://www.money.co.uk/guides/what-are-the-pros-and-cons-of-the-help-to-buy-scheme.htm1. you are limited to new builds.2. new builds are often small and expensive3. there were some stories that developers were hiking the prices for people using help to buy 4. not sure about remortgaging the H2B but i know you will have 2 loans to pay off after 5 years5. use the affordability calculators on pages like MSE.... normally its around 3-4x your annual earnings



Interesting to see you list only the cons from the pros and cons list on the attached. It's not for everyone but it does benefit some.

To answer the questions after year 5 the loan amount becomes an interest only loan chargeable at 1.75%. From this point you pay your mortgage and the 1.75% charge in separate payments. You can remortgage to pay off the HTB in full if you want/can afford to.

To answer the OPs question its 25% max from the government unless you are looking at shared ownership which is completely different.
g8spur07/11/2019 12:14

Interesting to see you list only the cons from the pros and cons list on …Interesting to see you list only the cons from the pros and cons list on the attached. It's not for everyone but it does benefit some. To answer the questions after year 5 the loan amount becomes an interest only loan chargeable at 1.75%. From this point you pay your mortgage and the 1.75% charge in separate payments. You can remortgage to pay off the HTB in full if you want/can afford to.To answer the OPs question its 25% max from the government unless you are looking at shared ownership which is completely different.


I found the link after I wrote the stuff but in general these were out concerns when we looked for homes. The double "mortgage" was not appealing at all.
And as the link mentions of your house increases on value you still have to repay 20% of loan based on the value so you are always at a loss
I had 20% HTB on first house a while ago, not sure they do 50%.
After 5 years, you start paying interest on that loan, but not actual loan. So you can either pay it off in full or include in your mortgage.
While you are in your 5 years, you can still pay it off. Remember it is a 50% of whatever the house value will be or at least what it was originally.

You won't necessarily end up with 2 mortgages and even if you do it's normal.

As for new builds, bought a second one now, definately not small and when you are a first time buyer, it saves the worry of needing cash for electric or other costly things as you have a guarantee.

Try affordability calculator on any bank website like Nationwide and never go with developers finance people.
mtsk07/11/2019 16:04

I found the link after I wrote the stuff but in general these were out …I found the link after I wrote the stuff but in general these were out concerns when we looked for homes. The double "mortgage" was not appealing at all. And as the link mentions of your house increases on value you still have to repay 20% of loan based on the value so you are always at a loss


It's better that's its 20% of the value as that means you are more protected if it goes down in value. Ultimately if it goes up it benefits everyone and as the government put more money in then its only right they get more back!

Also the "double mortgage" is a bit disingenuous. The charge for HTB is 1.75% after year 5 so a 250k house would pay £72 a month. Definitely still worth considering but if its all that stops you getting on the ladder after 5 years of no charges I wouldn't let it stop me!

If you don't need it then it's better not to use it but for those that need it and have no other option then it's not as bad as you make out In my opinion.
Edited by: "g8spur" 7th Nov
It is 20%. I sold my new build last year that I had HTB on and paid the 20% back. My house had increased in value in 4 years and I had to pay back 20% off the amount I sold it for, not what I originally borrowed. However, this wasn’t a huge amount and I still walked away with a profit. It helped me at a time when I really needed it and I would recommend it to anyone.
Edited by: "itslindsho" 7th Nov
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