Have you bought with Help to Buy and now looking at your options?
If you have bought your current home with help to buy and are now looking to either move on or re mortgage with the help to buy loan there are a couple more steps involved which JW Wood Chartered Surveyors can help you with.
Help to Buy is the government programme that aims to help first time buyers, and those looking to move home, buy a new build home. With a Help to Buy Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You don’t pay any interest or fees on the government’s equity loan for the first five years. In the sixth year, you’ll be charged 1.75%. After then, the fee rises by inflation based on the Retail Prices Index (RPI) plus 1% each year.
After this five year period and the interest charges begin, you have 3 major options:
- Pay the ongoing interest charges
- Pay off the loan (by raising the capital or re mortgaging)
- Sell your property
If you have a Help to Buy equity loan and want to repay this it is important to note that the government is entitled to 20% of any profit you make on the property (either when you sell or its current value if simply paying off the loan).
As part of the repayment process, a formal valuation of your property by a RICS Certified Surveyor is required, a service JW Wood Chartered Surveyors are able to offer. These Valuations must also be the current value, which in real terms means that they must be dated within three months of repaying the loan.
If selling your property we would recommend that you instruct our surveyors to carry out the valuation when you are sure of an exchange date.
If you would like to arrange a valuation for the purposes of redeeming a Help to Buy loan, or would simply like any advice, please call JW Wood Surveyors on 0191 383 0369.