Help to buy - Equity loans?

London_Boro

London_Boro

Well-known member
Anyone got any experience of this government scheme with regard to equity loans and can offer any advice on if it's a good scheme?
Many Thanks.
 
It can be good, like with anything it can be bad. New build only, value limits depending on regioncomplications if market dives and you’re in negative equity, admin fees if you remortgage etc. Will be plenty of sites that balance these up.

can you not get the on the new mortgage guarantee scheme? Or is it specifically the deposit causing the issue?
 
ThatFragranceGuy said:
It can be good, like with anything it can be bad. New build only, value limits depending on regioncomplications if market dives and you’re in negative equity, admin fees if you remortgage etc. Will be plenty of sites that balance these up.

can you not get the on the new mortgage guarantee scheme? Or is it specifically the deposit causing the issue?
Click to expand...
Cheers for this. Actually asking for a mate who has a chunk to put down, but with house prices the way they are down here, it equates to 5% and is struggling to get a 95% mortgage as he has not been here 3 years yet, he's a UK passport holder, but was brought up in South Africa and moved here a couple of years back. His mum and dad are both English and emigrated there years ago and are now also back in the UK.

He's being advised that Equity loan could be the answer to make up the shortfall in his deposit.
 
we did it back in 2015... you don't repay anything in the first 5 years then is only a small percentage with yearly increases based on interest rate and inflation.

its best to get rid of it as soon as you can as it can bite you... the value of the repayment is 20% of the value of the house so as the value goes up you will repay more.

at the same time you might find certain lenders will not do mortgages when you come to renew also.

Lastly, if you want to make any extensions or alterations it will be difficult... they can stop you and ask you to pay off the loan instead.


pro's and con's both ways.
 
London Boro

It looks a good scheme in general if you want a brand new property under £600k in London, with a housebuilder that is in the scheme. I assume he is under 40 and is counted as a British citizen.

Tell him to pay in off within 5 years as its gets expensive after that.

He might over pay as people often do with new build. You also lose of the profit, but that only happens if he makes money.

It was a Tory scheme to get more younger homeowners so its is really subsidised by the UK Government.

www.gov.uk

Affordable home ownership schemes

Help to Buy and affordable home ownership schemes to help first-time buyers and home movers - equity loan, ISA, shared ownership
www.gov.uk www.gov.uk
 
London_Boro said:
Cheers for this. Actually asking for a mate who has a chunk to put down, but with house prices the way they are down here, it equates to 5% and is struggling to get a 95% mortgage as he has not been here 3 years yet, he's a UK passport holder, but was brought up in South Africa and moved here a couple of years back. His mum and dad are both English and emigrated there years ago and are now also back in the UK.

He's being advised that Equity loan could be the answer to make up the shortfall in his deposit.
Click to expand...
He might still struggle with the 3 year rule as the 25% deposit criteria usually has to come from own funds, needs to find out which companies will accept it.
Only word of warning is that you have to pay solicitor fees twice and admin charges to target, which you don’t account for when you sign up
 
You must log in or register to reply here.
Back
Top