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How the hell do we pay off our Help to Buy equity loan?!

(20 Posts)
PurpleTreeFrog Tue 17-Nov-15 21:49:26

2 years since we bought the house and it's time to remortgage as our fixed rate is ending.

Our incomes have gone up and LTV has also gone up due to increased house prices. We'd like to pay off the Help to Buy loan 100% by taking out a bigger mortgage, so we can keep the equity for ourselves in future before it goes up even further. (Online mortgage calculators have confirmed we should get offered enough to afford this)

But I can't figure out how we actually pay the damn thing back! Dr Google has not really helped. Something to do with a Help to Buy agent?! I assume we'll need a solicitor/conveyancer... do we just call a solicitor and tell them to work their magic or is there something else we should do to get the ball rolling? Just waiting for a Decision in Principle from a new mortgage lender in the next few days so need to get this show on the road!

Hope someone can help as I've been struggling to find answers online... (maybe they don't expect anyone to ever pay the bloody things back - as long as house prices increase the amount you owe just goes up and up and up!)

littlepinkgiraffe Tue 17-Nov-15 21:52:35

Didn't you have a help to buy contract or agreement when you purchased the house? It should give details in there?

FreeWorker1 Tue 17-Nov-15 22:01:36

The weakness of Help to Buy Loans is that you dont own the property outright and as property prices rise you never catch up as you rightly say.

However, the key question is how is the current value of the house being calculated and by who and against what house price index?

It should be in your contract although I suspect the idea was based on the thinking that you would just sell the house and the owner of the other part share takes their share out of that.

Incidentally you are usually liable for 100% for any losses if the house does not sell for the price you bought it at. Its all upside for the owner of the part share and all downside for you.

PurpleTreeFrog Tue 17-Nov-15 22:22:50

Thanks for the input. Yes, I suppose we'll have to rummage through the massive stack of paperwork from the house purchase and see what it says there.

I do think it's not a great deal for many people, in 2 years the equity loan has already increased by nearly £10k! But for us it hasn't been too bad. If we can just pay it all off right now by remortgaging that'd be great, as its effectively not much different from someone with an ordinary mortgage moving to a bigger, more expensive house after two years. It allowed us to have a bigger house rent/interest free for two years but now we're in a better financial situation we want the equity for ourselves!

minipie Wed 18-Nov-15 07:04:13

I found this article link not especially positive! But gives a few lenders you could talk to and also suggests speaking to your help to buy agent.

StrawberryTeaLeaf Wed 18-Nov-15 07:18:11

Good grief, what a misleading thread title.

You are able to raise the finance to pay it off? You're merely confused about the administrative procedure?

You are very lucky.

FreeWorker1 Wed 18-Nov-15 08:04:49

PurpleTree - why don't you ring the provider and check?

A few things to watch out for.

1. Make sure you are not going to face a penalty for early repayment

2. Don't be suckered into overpaying to 'buy' the remaining equity. The true market value of that equity and how it is calculated is very important. It might be better overall just to sell the house and buy a new one with a new mortgage.

3. Check to find out if the original mortgage provider will be willing to give you a new mortgage based on the new valuation after you buy the remaining equity. If they wont then it is almost certainly being overvalued.

Lemansky Wed 18-Nov-15 11:07:01

We had a Firstbuy loan and it has to go via Housing Options Plus. They have an option on their website for Help to Buy Loans too, so wonder if it's just one company looking after them all? www.myfirsthome.org.uk/

Lemansky Wed 18-Nov-15 11:08:09

Also meant to say, if it's anything like ours, you will need a solicitor and it's a complete pain to do. But we are selling, not remortgaging so the added stress of the loan repayment process isn't helping anything!

wowfudge Wed 18-Nov-15 13:19:38

I can't help, but this thread has pointed out some of the pitfalls - DP was on about doing this to buy a new place!

HoneyDragon Thu 19-Nov-15 08:08:45

Strawberry

The idea of HTB is to pay it of ASAP confused

StrawberryTeaLeaf Thu 19-Nov-15 08:15:17

Yes I know it is Honey confused

StrawberryTeaLeaf Thu 19-Nov-15 08:19:27

Oh ISWYM. Read the thread title again. The last time I saw something like that it was a whole collection of people on MSE who couldn't raise the finance, who had bought houses under HtoB the value of which had dropped (leaving them in an extra complicated negative equity), whose wages had salled, who had split from their partner etc etc.

That was what that thread title led me to expect. Not someone who couldn't locate a phone number in a 'massive stack of paperwork'.

StrawberryTeaLeaf Thu 19-Nov-15 08:20:18

stalled*

Lucidlady Thu 19-Nov-15 08:34:20

Strawberry I think it's great that OP has got herself to a position where she can pay off the HTB and the funds can now be lent to someone else.

OP why not call up the organisation through which you got the loan in the first place (which might be quicker than hunting out paperwork)?

StrawberryTeaLeaf Thu 19-Nov-15 08:35:38

All I said was that it was a misleading thread title.

Honey called me back to confused at me about something quite different that I hadn't said.

MooPointCowsOpinion Thu 19-Nov-15 08:42:38

I had this issue last year! Trying to find someone to actually take our money and release the charge on the property was a nightmare. Once you find the right people (Housing Option Plus) they want a survey with a valuation, which is only valid for 3 months.

HoneyDragon Thu 19-Nov-15 10:05:56

I was confused as to why you were cross Strawberry they had thought about the funds to pay it off and were intending to do so, that's what they're meant to do grin as like you, mostly I see threads on here where people owe the balance and are upset as they've entered into the agreement without thinking it through.

When we were buying our house in June the solicter was saying they hated HTB as its a pita to organise borrowing it and a pita to pay it back. Did you get a pre owned house or a new build? If it was a new build than they may still have the details for the agent that sorted it two years ago?

PurpleTreeFrog Thu 19-Nov-15 11:00:45

Yes, I totally understand it's a thread title that could be read in more than one way:

There's "How the hell do we pay it off?!" as in, how the hell are we going to afford it, and there's "How the hell do we pay it off?!" as in, I've raised the funds now who is going to take my damn money?! I couldnt think of a better way to phrase it, sorry.

To be fair it's pretty obscure.

Rght, I've looked through the dreaded Housing Paperwork Box of Doom. I.e. all old paperwork and contracts relating to our house purchase 2 years ago...

It says we need to write to the "Lender" (meaning the Help to Buy lender, not the mortgage lender) informing them that we intend to pay the sum. Then within 14 days of that we need to get a Valuation by an independent surveyor chosen/agreed on by both parties. Then you pay the money and the "Lender" writes to the land register to get the Help to Buy part taken off the title. ..

Simples right? Nope, there are no contact details anywhere or information about how to arrange said valuation or how to pick a surveyor agreed on by both parties... no information on how to actually process a payment to them. It all has to be done within 3 months which also happens to be the duration a mortgage Decision in Principle is valid for. Seems like a long time but things take forever when it comes to property stuff... Christmas is coming up too.

I think I need to find a solicitor ASAP to help with this, preferably a hard working one with lots of patience...

MooPointCowsOpinion Thu 19-Nov-15 11:37:45

The 'lender' fobs all the work involved to the Housing Options Plus folk, they're a housing authority and a bloody pain to talk to!

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