Help-to-buy scheme phase 2

covenantuk said:
Help to Buy second phase only makes sense if you don't have the money for a deposit. The higher interest rate charged by the lender on the mortgage to cover the guarantee premium charged by the government will more than offset the government subsidy.

Simply put it's not a way to get a cheap mortgage, it's a way to get a mortgage if you haven't got enough deposit.
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This sounds in line with my thinking... I think given that we already pay £825 a month in rent and could justify a fair bit more than that for mortgage payments without stretching ourselves, and still accounting for some rise in rates before we were in serious trouble (I think)... Surely this would be enough to pay mortgage payments with? We just don't have a massive deposit (perhaps £12k after other costs associated with moving)
 
uncle_rufus said:
This sounds in line with my thinking... I think given that we already pay £825 a month in rent and could justify a fair bit more than that for mortgage payments without stretching ourselves, and still accounting for some rise in rates before we were in serious trouble (I think)... Surely this would be enough to pay mortgage payments with? We just don't have a massive deposit (perhaps £12k after other costs associated with moving)
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Totally depends on the size of the mortgage.

To rent a 1-bed flat in my area = £850 pcm
Mortgage of £100k to buy £150k flat using Homebuy = £580 pcm
 
krooton said:
Totally depends on the size of the mortgage.

To rent a 1-bed flat in my area = £850 pcm
Mortgage of £100k to buy £150k flat using Homebuy = £580 pcm
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Round here a 1-bed flat is far less than that :eek:... our £825 pcm is for a 3-bed terraced house... I would think we might be looking for a mortgage of around £180k - £200k
 
More details here: http://www.bbc.co.uk/news/business-24430010

I'm looking to buy my first house next year around the Reading/Berks area and i'm wondering if there are benefits to me to use this scheme, rather than a 'normal mortgage' (as we should have about 40-45K+ saved up by March next year).

Am i right in thinking that if a person can afford the 'massive deposit', then a standard mortgage instead of a help-to-buy one is better?
 
The fee for the 15% Guarantee is up to 0.9% of the sale value, which would be £1,800 on a £200,000 mortgage.

So yes, if you can afford to just get a deposit yourself, it would be much better.

Also, this scheme is for properties new and old up to a value of £600,000 ... :eek: err, if you are looking to buy a £600,000 house, I'm not sure you should be needing Govt support....

Heh, it's just crazy now that we all bandy figures around about mortgages for £150 - £200,000 like it's nothing, looking back 15 years one of the houses near me sold for £19,000 :p - sure they are just 2 bed starter homes, but even they are now nearing £100k today....crazy
 
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SMN said:
More details here: http://www.bbc.co.uk/news/business-24430010

I'm looking to buy my first house next year around the Reading/Berks area and i'm wondering if there are benefits to me to use this scheme, rather than a 'normal mortgage' (as we should have about 40-45K+ saved up by March next year).

Am i right in thinking that if a person can afford the 'massive deposit', then a standard mortgage instead of a help-to-buy one is better?
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More than likely - I can probably raise 10k deposit toward an 80-90k house from family, that would need to cover all fees etc too, so its difficult to know weather this would be a good idea for me.
 
SMN said:
Am i right in thinking that if a person can afford the 'massive deposit', then a standard mortgage instead of a help-to-buy one is better?
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Pretty sure... the whole point is that the banks don't want to risk very high LTV mortgages like 95% because they would loose out on so much money if the borrower defaults... so if the govt. (taxpayer) are prepared to cover an additional 15% of their losses should that happen it makes it less of a risk for the lender. If you have a bigger deposit % in the first place then it's not an issue as far as I can tell

Freakbro said:
The fee for the 15% Guarantee is up to 0.9% of the sale value, which would be £1,800 on a £200,000 mortgage.

So yes, if you can afford to just get a deposit yourself, it would be much better.

Also, this scheme is for properties new and old up to a value of £600,000 ... :eek: err, if you are looking to buy a £600,000 house, I'm not sure you should be needing Govt support....

Heh, it's just crazy now that we all bandy figures around about mortgages for £150 - £200,000 like it's nothing, looking back 15 years one of the houses near me sold for £19,000 :p - sure they are just 2 bed starter homes, but even they are now nearing £100k today....crazy
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The fee is paid by the lender though not the borrower isn't it? So I don't think that's an issue... I agree about the amounts and it's all well and good saying they will come down eventually and it needs to happen etc. and we're all silly for trying to jump on this false market... but like buying PC components (bonus points for off-topic forum theme reference :D) if you keep waiting for the next advancement in tech you'll end up with nothing... It gets to a point where it feels like not being able to get a house (if that's what you want to do) is in the way of everything - don't want to spend a lot on a wedding because it'd have to come out of the house fund, difficult to justify having kids because you want to get into a house first as you won't be able to afford to save as much once you're supporting a kid, and so on...
 
So 4.99% and zero fees fixed for two years, not to bad, halifax is a rip off higher interest and £995 fee.
Would rather it was fixed for longer.
 
uncle_rufus said:
The fee is paid by the lender though not the borrower isn't it?
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Ahh right, reading it again, yes it does seem to say the fee is 'dealt with entirely by the Lender'. I'm surprised, can't see why the banks would be happy paying a fee upfront to the Govt for 7 years of guarantee...without trying to pass it on :p

Will have to see how that works.
 
shadow_boxer said:
:confused:
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Whats confusing?
You cant use it if you want to own more than one house.
If you have an existing house you can sell it and get another house with this scheme.
uncle_rufus said:
Yeah I see... I'm a bit undecided still to be honest... Yes it is a mortgage but it's still 95% LTV and therefore a terrible rate with massive monthly payments (and that's even if the interest rates don't rise)
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It is more but acceptable. 10% deposit seems to be around 4.4% so your paying an extra 0.5% for two years fixed. Suppose it depends if you will ever get a large deposit together and how much you want to own a house. I want a kitchen that will pass, public H&S laws for food preparation, which i cant do in my rented place without spending considerable amounts.
 
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Soooo, there is no equity loan from the govt with this new scheme?? Just 5% deposit at a higher rate, backed against default 15% by the govt??

I don't see this getting abused.... Infact it's tempting.
 
Yep, thats right. No equity loan or rent etc.
just government secures 15% incase you default.
Bank pays government a small fee.
You just get a normal 95% mortgage with a corresponding interest rate.
More importantly any house can qualify as long as its under 600k, so not just limited to rip off new builds.
 
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