Help to buy/1st time buyer

[Queenofthedrivensnow]

Can anyone talk me through help to buy. I'm going full time next month so in about feb I will earn enough to get a 170k mortgage. I have 10k saved for deposit but hoping to scrape through with 5% so I have leftover cash for the move/appliances. There are houses in my area which are around 170k so I think k it's doable to buy.

There are several huge estates being built and lots houses on help to buy scheme. I can't get my head around it.

You get a loan off the government for up to 20% of the value of your house so you could get 34k off them plus your 8.5k to make your deposit 25% then after 5 years you either have to pay it back or start paying interest on it. You pay back 20% of the current value so if your house value goes up you pay back more. If older houses are around 170 I would expect a new build to be a lot more. 10k doesn't sound a lot to be honest even with help to buy have you got extra savings for solicitors fees, mortgage fees, stamp duty, surveys? Also just because the bank could lend you 170 doesn't mean you can afford it have you looked how much the mortgage would be monthly and does it fit your budget? I could never afford the monthly payment on the max mortgage the bank would offer us x

Monthly repayments are same as what I pay in rent.
It was the help to buy where you part buy part rent I was after

If you can get a mortgage for 170k then why do you want to do part buy part rent on a 170k house? New builds are much more expensive than older houses surely if you can afford a 'proper' mortgage you'd do that?

I just want to understand my options

Help to buy is a government scheme for people who can't afford to get a normal mortgage basically

I would say the shared ownership is more for people who can't get a mortgage for the full value of the house if you can get a decent mortgage but don't have the deposit I would look into the loan or stay renting for longer and try and save more for your deposit to do it yourself x

Shared ownership is the same as part buy/ part rent and comes under the help to buy umberella x

With all these schemes, you get terrible mortgage rates. If you can afford a normal mortgage, you'd be better off doing that.

If you get a shared ownership property, the share will be worked out on your affordability. The interest will be awful + you'll pay rent on the remainder. Selling will be difficult as you won't be able to choose the highest bidder but sell on to whoever is deemed to have priority. It's also a pain if you want to make any improvements etc. I would only ever consider that if there was no chance of affording anything normally.

Jojo- friends of ours have just reserved their s/o house and their mortgage is an extremely low rate of 1.74%

Thanks - right it's shared ownership I have been looking at.

There are 170k older houses around here. Lots of them are perfect for me so if I can get a 95% mortgage that's a goer. However it means that if I need to spend any money on improvements I won't have it. I have a separate budget for moving costs and appliances but not loads.

If I forgo all luxuries I could save about 3k a year so it would take me a long time to reach a 20% cash deposit.

Anyway...there are shared ownership options here on new builds that start at £200k. The shares start at 40%. I assume there are the repayments plus the rent which seems to be £249 a month on the 40% shared.

The upside so far as I can see is that I move in to a house that needs nothing doing to it so nothing to spend there guaranteed.

Are there any other benefits? Do I want to aim for a house more expensive that I can only part own?

What are the catches??

There is an estate being built next to me that is around 5000 homes so I'm assuming these houses in this scheme will be plentiful so I need to pros and cons.

You need to register with help to buy.. they will then give you a reference number if you qualify which you can then apply with. Dm me if you have any more questions :)

The catch is that your paying a similar amount out each month as you would on a full mortgage but your paying it into a house you'll never fully own? If I were you I'd buy the cheapest house I could for my needs and solely own it (with a mortgage) any work you do to it will add value when you come to sell even if you can't do work straight away x

Peachy I think that's what I need to hear thank you

The upside is you can own part of a house that you never in a billion years would have been able to afford. As you come into a better financial situation you can staircase and buy more so eventually you can own 100%. The rent part is subsidised aswell so for example friends of ours will be paying around £700 for mortgage and rent inc building ins/ service charge etc for a 3 bed house in an area that would usually cost you around £1200 to rent!

Are you sure you can borrow that much? You'd need to earn about 40k which doesn't fit with only being able to save 3k despite being in a low cost area.

Yes I've had a couple of quotes now. That's the limit though this is my point I've got no room to move at all.

How come you can only save that little? If your wage is so high?

Living expenses I could save more but would mean the kids missing out on a lot.

I would look on bromford / stonewater etc websites and contact them to talk you through everything x

Thanks I will x

I live in a shared ownership house (which I'm currently selling). It's a bit of pain really as the housing association which own the other half are a pain to deal with (hard to get hold of, constantly losing correspondence etc), and whilst the rent is subsidised you don't get any of the other benefits of renting (I.E, if there's any repair bills to be paid you will still be paying 100% of it). The housing association also retain the freehold which means there's very little you can do to the house without their permission. They also hold the buildings insurance, (even though we pay for this through monthly charges), and when we needed to claim on this a couple of years ago (leak which ruined the floor and needed completely replacing) this made it an utter PITA to claim, because they held all the account numbers etc and it seemed impossible to get hold of anyone who could give us the necessary details so that we can claim. I don't regret it exactly as we have good equity in our half and we would have never got on the housing ladder otherwise, but nearly 7 years on I will be pleased when this house is sold and we can buy a house that is completely ours. I'd personally buy through the equity scheme rather than the shared ownership scheme if you can.

Thanks kit Kat lots in your post I didn't know about