Help to buy

[VinceNoirLovesHowardMoon]

copied from chat
How much can I get with a help to buy mortgage? I qualify for one, but I'm a lone parent so one income. I can beg and borrow a deposit, probably around £8k which would be more than 5% of a £150k property. £150k can buy me somewhere liveable and the repayments would be around £700pcm which is less than I pay now in rent. BUT I only earn around £27k. For a normal mortgage I know I wouldn't be able to borrow £142k but could I do it with help to buy? As far as I understand the government underwrites 20% of the mortgage, so that would reduce my liable part (I know I'm liable for all of it but for mortgage purposes) to £112k. That's still 4x my salary.

Please help me understand, my landlord is selling and I need to work out what I can do! I know I need to see a financial adviser of course but it would be great to have a basic understanding of the scheme before I do.

Thank you

It's actually a pretty good scheme as long as you don't consider yourself owing 100% of property. It works exactly as you describe, basically with your 5% deposit and the govt 20% you are only mortgaging 75% allowing you to buy a more expensive property than you could usually. As your loan to value is only 75% then you get access to even lower interest rates too so that bring payment down even more. We were amazed how little our payments would be. Any developers will have independent mortgage advisors who can help you out more...but one thing I must point out is that your deposit CANNOT be borrowed even from family. It must be yours or gifted...

You can borrow it from friends or family however they would have no legal right to it back as they have to sign to say they gifted it. If they trust you then it's not a problem.

Thanks guys. I will funnel the loans through my parents so there will be a single payment from them and they will confirm it is a gift. People trust me, I'm trustworthy :)