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Original poster

Help - can I pay back help to buy and take out equity?

14 replies

colourPink · 13/02/2022 21:43

So me and my (now) husband bought our new build almost 4 years ago. At the time we brought the property for £325,000 using the help to buy scheme (20%).

We currently have an existing mortgage of £228,000 and we're due to remortgage. The developers are still building the same home as ours in their new phase without garages (ours has one) for £375,000. So we can presume our house has increased in value.

As we're due to remortgage we want to pay back our help to buy now. So if we go by the new price we might be looking at £75,000 (ish) as it's 20% of whatever your property is worth at the time. We have touched base with a mortgage broker who believes this is possible as we have enough positive equity.

I understand all of that. This is where I need help:

Presuming we have over £100,000+ equity in our home we can pay off the help to buy but can we take any extra funds out? We had to get a loan out to help with the wedding and we'd love to clear it. That being said I don't want to make a stupid decision that may effect us later in life. Will it? If so, how? What would happen if we took more positive equity out?

I hope this makes sense - I just want to make sure I understand everything before making a decision. TIA.

OP posts:

JamMakingWannaBe · 13/02/2022 22:30

Can you afford the extra borrowing?

Mumski45 · 14/02/2022 08:00

You will need to borrow £303k to remortgage and pay off the help to buy (plus costs which can add up). If you want to pay off more borrowing then you will need to borrow even more. You haven't said how much you can afford to borrow so it's difficult to know what the consequences of borrowing more would be.

Tippexy · 14/02/2022 08:03

Don’t put your wedding day on your mortgage… 🙈

gunnersgold · 14/02/2022 08:18

Have you checked the details of the help to buy ? I think there is something about paying back half the equity when you pay it back.

gunnersgold · 14/02/2022 08:19

Sorry not half but certainly some of it .

Moobootoyoutoo · 14/02/2022 09:42

Work out the actual cost of doing that, even if affordable and you'll be turning your wedding 'day' into a ridiculously expense one - a seriously bad idea

Moobootoyoutoo · 14/02/2022 09:43

Well unless your loan APR is 40% over ten years and you can get 2% on the mortgage but that's not likely

Thistooshallpsss · 14/02/2022 09:48

It’s generally not advisable to turn an unsecured debt into a debt secured against your home. You will also be paying for your wedding for the next 30 years. Better to face the pain now and double down on the debt by cutting back/ earning more.

Ejk1990 · 14/02/2022 11:54

@gunnersgold

Sorry not half but certainly some of it .

If you take 20% loan on h2b, then you pay back 20% of the current property value. So if your house value has increased, so does the loan value.

parkrunner1977 · 14/02/2022 12:08

When you remortgage you would be able to borrow as much as the lender will allow you to up to the max LTV & affordability criteria. If that gives you additional money to repay the HTB loan and the wedding loan then that's fine.

For the HTB redemption (either half or full) you have to pay for an independent surveyor to come out to value your property specifically. I redeemed mine in full last January and you will also need a solicitor as well. The fee for the sol was £745 and the survey £240.

ChateauMargaux · 14/02/2022 12:17

Even if the property developer is selling houses of the same design as yours for a higher price, there is no guarantee that a mortgage assessor will value your house at that price.

gunnersgold · 14/02/2022 16:28

@Ejk1990 it's a lot though isn't it . We bought a new build but declined the HtB for that reason . Our house has increased by £150k . I wouldn't want to be paying them back some of my equity!!

Ejk1990 · 15/02/2022 08:08

[quote gunnersgold]@Ejk1990 it's a lot though isn't it . We bought a new build but declined the HtB for that reason . Our house has increased by £150k . I wouldn't want to be paying them back some of my equity!!
[/quote]
Its a huge amount! We bought a year ago. Same house on the site has sold for 40k more. We took out 60k, so I dread to think how much we will repay back! But it was the only way to get on the property ladder for us. Hoping house prices calm down when I want to pay back.

gunnersgold · 15/02/2022 08:16

@Ejk1990 sounds like you understood it all. I live in a new estate and there seems to be some issues with people not realising the facts ( not listening 🙉) . Lots of talk of special solicitors that deal with it !
We were lucky it was our 3 rd house so we had equity but I feel for you if this was your only option !

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