Beyond Help to Buy:
Understanding Your Options After Using the Help to Buy Scheme.
If you used the Help to Buy Scheme, you may be wondering what’s next…
Is now the time to clear it?
What are the costs involved?
Who should you speak to?
This guide answers those questions, and provides specific strategies for those of you in that position.
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The Help to Buy scheme was a government-backed initiative designed to make homeownership more accessible for first-time buyers.
It played a pivotal role in assisting those looking to move onto the property ladder by providing them with a government-backed equity loan. This enabled buyers to secure a home with a smaller deposit, typically just 5% of the property’s value. The scheme not only made homeownership more accessible, particularly in a housing market marked by rising prices, but also promoted economic activity by stimulating demand in the construction and housing sectors.
If you used the Help to Buy scheme and are coming to the end of your initial mortgage period (or equity-loan interest free period), you may be wondering what’s next.
The Help to Buy Remortgage Playbook aims to answer all your questions and guide you through the process.
Frequently Asked Questions
What if I want to sell my Help to Buy property?
The first step is to contact your Help to Buy agent. They will guide you through the steps involved in selling your property and provide you with all the necessary information. It is important to inform them of your intentions as early as possible to allow for a smooth transition.
When you sell your property, you will need to repay the equity loan in full. The amount you repay will depend on the current market value of your property.
As the equity loan is separate from your mortgage. You will need to engage with your mortgage lender separately to settle any outstanding mortgage balance.
Once you have received the valuation and determined the amount to be repaid, you can proceed with selling your property.
You will need to settle the outstanding equity loan amount. This can be done through your solicitor, who will handle the repayment on your behalf.
Can I make additional repayments on my Help to Buy equity loan?
The minimum amount you can pay off your Help To Buy equity loan at any time is 10%. Please bear in mind, every time you pay off part of your equity loan you will have administrative costs and you will need to pay for a RICS valuation each time.
Should I repay my equity loan?
One of the key decisions you will face as a UK mortgage customer and a Help to Buy customer is whether to repay your equity loan.
This will depend on many factors such as:
– Current mortgage interest rates
– Your financial situation
– Your current equity
– The equity loan interest payment amount
What will my equity loan repayments be?
After the first five year interest free period you are now at a point where in year six you will be paying 1.75% interest. Then in year 7 this will increase, if taken out 2013-2021 by Retail Price Index (RPI) + 1% and then if taken out after 2021 by Consumer Price Index (CPI) + 2%
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