Help2Buy judgement day thread

uncle_rufus said:
Thanks for this, as it happens I spoke to them on the phone earlier and learnt the same thing...I think I'm probably just going to accumulate £500+ every-other-month so that I can pay with the term-reduction option (to me that feels like the method that results in the biggest saving in the end)... Keeping the term the same and not recalculating feels like it's just saving into a 0% interest savings account until the end of the next deal/rate change, isn't it?
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No, because once its paid its paid, there will be a small sum to pay to end the mortgage, they will write to you once you approach getting to zero. If you change your term your tied to the new end of term. If you keep the term the same and you do use some of your overpayment reserve (for whatever reason) then you will not need to increase your payments to cover the reduced term. If you lower the term, your committing to clearing by that date, so if you used your overpayment reserve you would need to increase your payments.
Originally you only had the option to reduce the term or reduce the payments. Now you can specifically keep the term and the payments, so you just gain more flexibility by selecting that option.
You can in fact also change it online at any time, tick one of 3 boxes and click select. If you make an overpayment and reduce the term they will write to you each overpayment (of more than £500) and tell you your new end date.

The interest is calculated daily on the outstanding balance, so your literally saving money the moment you make an overpayment. Well I think technically they apply it the following day.
My overpayments I just send via online banking, quite easy, instructions are on their site. I paid something like £50 the first time, just to be sure then wacked it up afterwards.
 
Yeah I'll be using online banking to do it (as one off payments which I'll make as and when rather than setting something regular up - again for flexibility in case something comes up one month that I need to pay for)...

I think I get what you're saying... the way the woman on the phone described it to me made it sound like under the "keep term + payments the same" option I was essentially deferring any interest calculations on the outstanding balance until the end of my current fix. If they get recalculated every day then I can see the advantages of this case, and I think that will allow me to pay less than £500 per month which is also more straightforward (or does it still need to be over £500, their site isn't totally clear about that)
 
I got HTB. Plan is to move end of this year after 3 years and just give the Government 20% of the sell price. Might be better ways of doing it...

Was tempted to fold the 20% government loan into the mortgage, hopefully get a valuation at time of re-mortgaging that is a fair bit lower than what I think I can sell it for... Probably won't bother with the hassle though.
 
uncle_rufus said:
Yeah I'll be using online banking to do it (as one off payments which I'll make as and when rather than setting something regular up - again for flexibility in case something comes up one month that I need to pay for)...

I think I get what you're saying... the way the woman on the phone described it to me made it sound like under the "keep term + payments the same" option I was essentially deferring any interest calculations on the outstanding balance until the end of my current fix. If they get recalculated every day then I can see the advantages of this case, and I think that will allow me to pay less than £500 per month which is also more straightforward (or does it still need to be over £500, their site isn't totally clear about that)
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Under £500 they don't give any option. The default is it will not affect anything until your next review. Which for you is when your fixed runs out.

Over £500 its the 3 choices, but they will change it immediately, hence you need to pick. The default iirc is change amount but keep term the same. Which is only really an issue if your paying or ever plan to pay close to your max repayment amount, if you do this hurts as your in effect paying a higher and higher overpayment and lower and lower normal amount each month.

Yes you can pay less than £500 every month and you will see no change. But you just need to be aware that at the end of your fix they will recalculate, and the default is to reduce your payments (ie keep term the same).
The simplest way round this is to make a greater than £500 payment not too long before your fix ends and make no more small ones, which the option set to change neither payment amount or term.

Interest on nationwide is daily, and charged on your outstanding balance, at least I believe so on all loans for quite some time. Check your offer letter if you still have it, will be in there but I would be surprised if thats not the case.
 
Mercenary Keyboard Warrior said:
Yes you can pay less than £500 every month and you will see no change. But you just need to be aware that at the end of your fix they will recalculate, and the default is to reduce your payments (ie keep term the same).
The simplest way round this is to make a greater than £500 payment not too long before your fix ends and make no more small ones, which the option set to change neither payment amount or term.
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Right that makes sense... slightly weird the way it works but not too tricky to do - so essentially when they recalculate they base what happens on all previous sub-£500 payments on whatever your preference is set to by the final over £500 payment? I guess there's no way to login to their online banking service and set the preference for what will happen there (and not need to do the "trick" with the £500+ payment near the end)? Or just call them and tell them what you want to happen?
 
uncle_rufus said:
Right that makes sense... slightly weird the way it works but not too tricky to do - so essentially when they recalculate they base what happens on all previous sub-£500 payments on whatever your preference is set to by the final over £500 payment? I guess there's no way to login to their online banking service and set the preference for what will happen there (and not need to do the "trick" with the £500+ payment near the end)? Or just call them and tell them what you want to happen?
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Yes exactly, less than £500 they do not recalc the payments/term, I guess they consider it not significant, as I said it affects the interest anyway, just nothing else changes until its triggered (rate change basically)
And yes, when a recalc is triggered it will go with what your setting is, so if you have set to affect neither then all your repayments you have made will go against this process. yes you can set this in online, its the 3 options you can choose between.
Its just that on sub £500 payments it doesnt look (so they say)
I suspect you can call them and ask them to trigger a recalc if you have made significant overpayments.
When you star overpayments it will seem a little odd in month one, you will get an overpayment balance on your online, but it works in monthly buckets, so its always assuming your not paying anything else that month. Its right as soon as your monthly
payment goes in, but can give an odd balance any other time.
 
Mercenary Keyboard Warrior said:
Yes exactly, less than £500 they do not recalc the payments/term, I guess they consider it not significant, as I said it affects the interest anyway, just nothing else changes until its triggered (rate change basically)
And yes, when a recalc is triggered it will go with what your setting is, so if you have set to affect neither then all your repayments you have made will go against this process. yes you can set this in online, its the 3 options you can choose between.
Its just that on sub £500 payments it doesnt look (so they say)
I suspect you can call them and ask them to trigger a recalc if you have made significant overpayments.
When you star overpayments it will seem a little odd in month one, you will get an overpayment balance on your online, but it works in monthly buckets, so its always assuming your not paying anything else that month. Its right as soon as your monthly
payment goes in, but can give an odd balance any other time.
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Awesome, thanks so much for all the advice it's been really helpful :)
 
I called up my mortgage lender and we were able to work out that i will have 21% LTV on my property by the time that i have to start paying the interest on it in 2 years so it looks like if nothing changes between now and then financially with myself and my wife we will be able to suck up the 20% owed to the government then.

They have confirmed that this would be totally fine to do so thats what we will end up doing. We cant afford to pay the 60k outright.... lol
 
Well a minor update - happy to say I got everything setup and made my first overpayment this morning :)

Actually feeling quite pleased as logging into Nationwide's online thing (which I hadn't registered for until now) I found the outstanding capital on our mortgage was quite a bit less than I was expecting - so off to a great start! I'm looking forward to being able to check it and see the effect the repayments are having, and I think if I can stick to a minimum of £250 a month we should be able to hit about 80% LTV including the equity loan once we get to the end of this fix (~2.5 years to go)
 
Had a leaflet drop through the door from another developer in our area basically saying:

"We know you're just coming up to the end of your 5 year interest free period on help2buy. Move into a (bigger) one of our houses and you can renew the scheme, borrow even more and get 5 more years of interest free period! What are you waiting for?!"

Completely crazy, and seems an abuse of what the scheme is meant to be for.. I'm not actually even sure how they're able to offer that? (Suffice to say we won't be taking them up on the offer!)
 
There are/were two schemes, one for first time buyers and one for people buying new houses.

Nothing specifically bad about it I guess, but it has the possibility to skirt close to misselling depending exactly how they are going about it, using mortgage advisers etc
 
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