Get into debt or move to new home on htb?

[elmo1980]

I'm not sure if this is the right section or even what I'm asking is possible but I'm not seeing mortgage broker for a couple of weeks so grateful for anyone with knowledge or advice.

Basically we have a 14 month old ds and another due in a few weeks so when I return to work next year we are looking at nursery fees of between 1500-1800 a month. We hadn't budgeted for second baby it was a bit of a surprise albeit a welcome one but it does mean things are going to be tight for the next couple of years.

I can't give up work as dp doesn't make enough to cover household bills but earns too much for us to claim any benefits so my salary is very much needed.

We have around 60k equity in our house and it would be good to free some of this up so one option we are considering is buying a new build home on the help to buy scheme so we only have to pay 5% deposit which would free up equity to cover nursery fees.

We can't remortgage as the redemption fee is too large and we already took out additional borrowing to finish buildin work so ulikely we can borrow more.

Otherwise we are looking at getting into a fair amount of debt next year and I really don't want to start taking out loans or using credit cards to cover us but at the same time thinking it's only for 2-3 years then childcare costs drop dramatically.

Thanks if you're still reading any thoughts on what we should do gratefully received!

Can you definitely use HTB if it isn't your first home?

I'd always prefer to avoid debt, but if you're really frugal and reduce your spending a bit (assuming you haven't already) you should keep debt to a minimum.

Yes I thought htb was for first time buyers only.

Why can't your husband be the SAHP?

I would hold onto the equity. Also, what would your take home pay be? Presumably it'd need to be over 2k to break even (with nursery at 1800 + commuting + work related expenditure). I wonder if you might be better off working evenings or weekends so that your OH can cover the childcare yourselves. Or if both of you could go part time - with both working 4 days a week, you'd only need to pay for 1 day of childcare.

On the mortgage front,, see if you can stretch the mortgage or perhaps go interest only while you're paying all the childcare. Presumably, you'll be on maternity leave for a bit and then it won't be that long till the older child is eligible for 30hours of nursery.

HTB is an equity loan , you would have to pay fees in five years time and if you sell is a percentage of the purchase price. Can you see an IFA?

3 days not 1 day of childcare (I'm assuming weekends off).

In addition to not being a first time buyer, it sounds like you are wanting to avoid the redemption fee your current mortgage deal. So I guess you'd be looking at porting your mortgage to the new property? If so, your lender will have to accept a second charge on the home in the form of HTB. A lot don't do this.

I've been told by broker that htb would be available to us.

My take home is 2k and dp is 1.8k so we can't afford to drop either salary completely or go more part time (I already do 4 days a week).

I spent a long time last year cutting back our bills as much as possible and we live very frugally as it is so our outgoings can't be cut any further.

Interest only on the mortgage isn't a bad shout I will look into how much that will help thanks.

Yes def need to look into the small print of htb as don't want to Get caught out with fees and all sorts in a few years time putting us in an even worse position.

That's interesting about porting a mortgage and companies not allowing another charge to be put onto it so will mention that to broker when I see him.

You can have HTB for s subsequent purchase
It is quite an expensive way of doing things so I wouldn't recommend it unless it is your only option
Key is whether your Lender will allow you to port
I definitely don't think that's a given