Help to buy equity loan?

[Fernintheforest]

Does anyone have any experience of using a help to buy equity loan?

We are first time buyers with an agreement in principle and deposit with monthly repayments that I would be comfortable with if we found a house and used our full in principle offer.We have also found a few properties in our area at our price range that I like so feel in a comfortable position.

However, a few estate agents we are using keep trying to push us toward the Help to Buy equity loan as it would increase our budget. Personally I’m not sure it’s necessary as I have seen places I like in my budget but am I missing something here? Could it actually be really beneficial?

I have looked into it and the reviews seem very mixed.

I would only use the scheme if I absolutely had to, after all you still need to pay it back at some point, and it limits you to certain (IME overpriced) new builds

@PrincessPaws I noticed this, they keep trying to show us help to buy new builds even though we want a period conversion (a few of which we have found in our price range already so I www a bit confused by the push towards this)

*was

If you have enough of your own deposit/funds to not have to use it then don't, but it is a good first time buyer scheme. I'm due to move into my first home in the new year and I used the HTB Equity Loan scheme, without it I wouldn't have got on the property ladder!

When I come to sell the property the government will take 20% of the value (not the same 20% that they put in - or 40% if you're in London) so that is something to bear in mind. Also you will start paying interest on the loan after 5 years. Our mortgage advisor has been excellent and has drafted up a rough idea of what those interest payments will look like - for us it'll be about £80 p/m extra.

Essentially; don't use it if you don't have to, but it's been really helpful for me.
Good luck and congrats!

I wouldn't. Look at the latest issues with Help To Buy loans in the papers - they're tied up with the cladding scandal. Look at End Our Cladding Scandal on Twitter if you can. In short, Help To Buy and Shared Ownership new builds are costing thousands of owners 10s of £1000s to remediate due to poor build. Avoid until this is resolved if you can.

I should add that my house has no cladding, is freehold etc. You only hear the horror stories in the papers but of course do your research. If ANY of your prospective homes have cladding PLEASE avoid them at all costs!!

Key things that aren't always clear

• you pay back 20% of the value of the house, not the amount of the loan.
• you have to pay a not insignificant amount for their approved valuer to value the house
• you are unable to do bigger work to the house (we looked at knocking into the garage but weren't allowed)

I wish we hadn't taken it

Thank you for the advice, I don’t honk we will take one as we really don’t need it