Owning your own home

Sorry - it 5 years interest free

With a deposit of 5%, the Help to Buy Equity Loan scheme allows you to borrow an additional 20% of the purchase price of the property from the government; the loan is interest-free for the first 5 years

what about taking that mortgage even if I already have a 20% deposit and keep 15% as a safety in case
I lose my job etc. ?

serious?
I could do it on a remortgage of my existing gaff?
I'm tempted. I could get about £50,000 off them and bang it in a low risk bond or sommat and forget about it, then pay it back in full in 5 years time and trouser a good couple of grand.

As I understand it, you don't even have to move, you can just re-mortgage the house you're in. You have to sign a form that says you have no other properties.

If this is true, and its true that you don't have to make any payments on the loan from the government for 5 years then:

Say you are remortgaging a house valued at 600k with 450k left on the mortgage. Along with the new mortgage you take 120k interest free from the government and put it into a 5 year savings account @ 3.05% (from moneysavingexpert.com).

In 5 years you withdraw the savings, payoff the gov and are left with £19450.90 if the interest is calculated annually.

Though I can't believe that they will let people replace equity with this loan in a house they already own. That would be stupid.......

beat me to it WjP

3.9 The scheme will also be designed to ensure that lenders cannot use the Government
guarantee to restructure the riskiest part of their existing loan book, and that borrowers remain
the beneficiaries of the intervention. For that reason there will be some types of remortgage
transactions that will not be eligible for the scheme. In particular, a lender will not be able to
access the scheme when a borrower is remortgaging a loan which is already part of the lender’s
existing loan book. A borrower remortgaging with a new lending institution would, however,
still be able to benefit from the scheme.

erm....I think that means that you can't take the equity out of your house but you could use the loan if you are struggling to remortgage...I think

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/221897/help_to_buy_mortgage_guarantee_scheme_outline.pdf

Sounds like you just need to swap lenders.

Does it? The words confused me.

you will not actually get money from the government but they will give the lender a guarantee so
your 95% mortgage has the same interest rate like a 75% one.

If there's no money but a guarantee, why do you have to pay it back after 5 years? That makes no sense.

Hmmmmm....
There MUST be a way I can fiddle this.

Remortage with 10 different lenders, taking the 20k each time, mwuahahahaaa

Imma just run the numbers...

he he he... boobs

58008 618

I've been chatting to my mortgage broker about this whole thing - once he comes back with some (qualified) recomendations I will let you know. The issue seems to be even though they will guarantee you the deposit you would still have to be financially viable enough to afford the repayments. The amount you can borrow is still roughly the same dependant on how much you earn....I think.

It also seems open to anyone except those wanting to do buy to let on it. I "think" I could rent out my current place and then use the scheme to buy a new place

Amey - if you want someone to talk to re visa PM me as can share the brokers details. I know him from school and he is a good guy.

Just tell me where I go to get the 90k and we're done here..

:)

It's not clear to me whether the interest rate on a 95% loan where 15% of the capital is covered the the gubberment will be the same as the interest rate on an 80% loan where you front the whole 20% yourself. It seems unlikely to me.

OK.
I just had a chat with my dad who is an IFA and specialises in first time buyers and hard to mortgage rascals.

Looks like you put 5% down.
Government hypothetically put 15% down.
Lenders still lend at 95% LTV.

So you will get shit terms from the lenders and then, of course, you will start to pay interest on your 15% loan after 5 years.

The scheme will only be administered, so far, by three of the largest lenders.

To surmise;
Tax payers pay to bail the banks out.
The banks are told not to take risks anymore.
Banks stop taking risks like high LTV mortgages.
Tax payers then pay to encourage the banks to take more risk.

It might work in the favour of a few buyers with very specific circumstances, but it is not actually going to make much difference to the market for buyers.
It is, as my old man says, "a load of Etonites applauding their own farts".

I would guess so.
I would read that as meaning there is someone in there and under SPT they are entitled to a full rental month grace.
So if they pay their rent on the 27th of the month and you serve notice today they would have until the 27th of Nov to move.

2 months from the Landlord, 1 from the Tenant.

So if a Landlord gave notice today for a contract where the rent is paid on the 27th she would get the house back on December 26th.

If the Tenant gave notice it would be 26th November.

It's not a reason not to buy a house unless you absolutely must move before the Tenancy can be ended.

"a load of Etonites applauding their own farts".

"Etonians", but otherwise I think he got the nail squarely on the head.

"Etonites". Because it may cause mild irritation.

Fair enuf, but whether "Etonians", "Etonites" or "Etoners" they cause more than mild irritation.

Lenders still lend at 95% LTV.

Can this really be the case? Surely these must be a slight improvement of terms for this to even make sense as a proposition...

The proposition is that it's more likely the average person with 5% deposit will be able to get a mortgage.

Fair enuf, but whether "Etonians", "Etonites" or "Etoners" they cause more than mild irritation.

How about "Etans", to rhyme with "Thetans"?