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AdamoMucci

First HTB fees due next month

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To add, the property is 100% fully in person's name who purchased the property, HTB is just a GOV loan, like a mortgage. 

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9 hours ago, longgone said:

sounds rigged :lol: hmm not sure.

It's rigged if the GOV push up prices knowing they will make money from HTB when the buyers decide to sell the house, which they are. It's a free market, but with influences. 

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47 minutes ago, Scramz said:

 

Tbh it seems grey, but it's not. I sat with a solicitor and went into detail in regards to HTB, he was in favour of, if people need to buy before a possible drop in house prices then HTB would be the way to go as the GOV will share the hit, allowing a 25% fall before effecting you when it comes to remortgaging, which is a good point. 

Let me get this straight, for arguments sake, someone who buys a 200k house using HTB, 40k HTB loan. Value drops to 100k, for simplicity. That means they still owe 20k on the HTB loan, it's all in proportion isn't it?

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7 minutes ago, Si1 said:

Let me get this straight, for arguments sake, someone who buys a 200k house using HTB, 40k HTB loan. Value drops to 100k, for simplicity. That means they still owe 20k on the HTB loan, it's all in proportion isn't it?

2

That is is correct. On the flip side, if the house is now worth £400k, they would owe £80k when it came to either paying down the equity loan or selling the house.

In addition, if they choose to step up their share/pay down the equity loan, they can't do this as they please like overpaying a mortgage/loan. From my understanding, the owner(s) have to get the house valued and then have to pay off  in large portions. I can't recall the exact amount but its even % points eg 50% of the loan. 

When my partner and I were looking at buying a home last year,  we considered Help To By, however, there were a number of red flags. Paying down the equity loan was one of them considering it would have to be a rather large chunk of money. Plus there seemed to be intentional obfuscation in regards to how the fees worked. The majority of Help To Buy users will not have understood what they've got themselves into. 

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1 hour ago, Si1 said:

Let me get this straight, for arguments sake, someone who buys a 200k house using HTB, 40k HTB loan. Value drops to 100k, for simplicity. That means they still owe 20k on the HTB loan, it's all in proportion isn't it?

That is true, but also if they sell with the approval of a HTB agent, they only owe what is left after they repay their first charge (mortgage).

So, if that original 200k is split as follows:

10k deposit (oh for feck's sake...)

40k HTB loan

150k mortgage

Value drops a few over the next few years and they sell for 100k with 100k still left on their mortgage, they only repay the outstanding mortgage balance and are scot-free. HTB debt is forgiven.

If they sell without agent's blessing, they still owe 20k.

That's my understanding.

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2 hours ago, Scramz said:

At the point of sale or repayment of loan, the property has to be valued by 3 RICS persons, I beleive. Not a representative of HTB. 

Tbh it seems grey, but it's not. I sat with a solicitor and went into detail in regards to HTB, he was in favour of, if people need to buy before a possible drop in house prices then HTB would be the way to go as the GOV will share the hit, allowing a 25% fall before effecting you when it comes to remortgaging, which is a good point. 

Id doubt a solicitor would have the maths skills to work out HTB.

HTB was a boost to house builders, putting people and UKGOV on the line for house builders profit.

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8 hours ago, Si1 said:

Let me get this straight, for arguments sake, someone who buys a 200k house using HTB, 40k HTB loan. Value drops to 100k, for simplicity. That means they still owe 20k on the HTB loan, it's all in proportion isn't it?

Yes, the loan equals 20% of the value of your property regardless of property price. Not the figure you borrowed, the %.

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6 hours ago, spyguy said:

Id doubt a solicitor would have the maths skills to work out HTB.

HTB was a boost to house builders, putting people and UKGOV on the line for house builders profit.

Maybe it was to boost to house builders, but these properties still sell on the 2nd hand market without an HTB loan after the original buyer used HTB. Don't forgot HTB is not available on every new build property, it's only selected properties on a single site. Mainly ones not sold within 6 months on build start.

If anything, HTB is more of a headache in terms on paper work and terms than non HTB. That's why you don't tend to get 'deals' if HTB is involved but you do get deals without it, on the same property. 

HTB is a hand out it builders and put upwards pressure on prices, but tbh, when you work it all out, it's a good deal for the buyers taking advantage of it. Low rates, etc.

The only real concern is if house prices fall, but even then you would be in a better position than someone recently buying a older property without HTB without the GOV loan buffer.

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7 hours ago, CanAffordWontPay said:

That is is correct. On the flip side, if the house is now worth £400k, they would owe £80k when it came to either paying down the equity loan or selling the house.

In addition, if they choose to step up their share/pay down the equity loan, they can't do this as they please like overpaying a mortgage/loan. From my understanding, the owner(s) have to get the house valued and then have to pay off  in large portions. I can't recall the exact amount but its even % points eg 50% of the loan. 

When my partner and I were looking at buying a home last year,  we considered Help To By, however, there were a number of red flags. Paying down the equity loan was one of them considering it would have to be a rather large chunk of money. Plus there seemed to be intentional obfuscation in regards to how the fees worked. The majority of Help To Buy users will not have understood what they've got themselves into. 

You are correct. The house will be revalued at the time you want to pay back and you can only pay back more than 10% of the property value, meaning your second payment would wipe your loan. Min 1 payment or max 2. 

Most people I would think would save and staircase into the mortgage by year 5. Pay half in cash and half into the mortgage. Or all into mortgage, however it works out best, then you would never pay the 1.75% interest.

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1 hour ago, Scramz said:

Most people I would think would save and staircase into the mortgage by year 5. Pay half in cash and half into the mortgage. Or all into mortgage, however it works out best, then you would never pay the 1.75% interest.

1

Is that even going to be possible when their equity loans are £60-£80k (in this neck of the woods at least) and they can barely manage to scrape £15k together for the 5% deposit? What about the people in London who have 40% equity loans ? :blink:

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23 hours ago, CanAffordWontPay said:

That is is correct. On the flip side, if the house is now worth £400k, they would owe £80k when it came to either paying down the equity loan or selling the house.

In addition, if they choose to step up their share/pay down the equity loan, they can't do this as they please like overpaying a mortgage/loan. From my understanding, the owner(s) have to get the house valued and then have to pay off  in large portions. I can't recall the exact amount but its even % points eg 50% of the loan. 

When my partner and I were looking at buying a home last year,  we considered Help To By, however, there were a number of red flags. Paying down the equity loan was one of them considering it would have to be a rather large chunk of money. Plus there seemed to be intentional obfuscation in regards to how the fees worked. The majority of Help To Buy users will not have understood what they've got themselves into. 

they shouldn't have signed up to a multi hundred thousand pound DEBT then should they? 

 

if the prices go up did they understand what they got themselves into and are entitled to the mad gainz? 

 

Troll.

 

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16 hours ago, Scramz said:

Maybe it was to boost to house builders, but these properties still sell on the 2nd hand market without an HTB loan after the original buyer used HTB. Don't forgot HTB is not available on every new build property, it's only selected properties on a single site. Mainly ones not sold within 6 months on build start.

If anything, HTB is more of a headache in terms on paper work and terms than non HTB. That's why you don't tend to get 'deals' if HTB is involved but you do get deals without it, on the same property. 

HTB is a hand out it builders and put upwards pressure on prices, but tbh, when you work it all out, it's a good deal for the buyers taking advantage of it. Low rates, etc.

The only real concern is if house prices fall, but even then you would be in a better position than someone recently buying a older property without HTB without the GOV loan buffer.

:lol::lol::lol:   do you have one to sell ??? 

It has already been established that since HTB came along, new builds are 30% more expensive to buy than older properties, there is no HTB 'buffer'

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300k in my town buys you a nice established 1950s 4 bed detached with an 80ft garden, free air down both sides, and off road parking for 2-3 cars.

Or

A new semi or link detached shoebox with the loft space already built into, front door opening almost onto the street, single width drive and postage stamp garden and the neighbours cars and vans scattered all over the narrow road up the pavements. Modern density rules and/or land prices have built this Z grade shite and flogged it to the desperate with help to sell. Often zero local infrastructure either, just houses dumped on a bit of space the opposite side of a main road to existing housing.

Of the newer estates, the established 90s and early 00s built 4 & 5 bed detached stuff is +30% on 2007 whilst the award winning "townhouse" development up the road of 2006-2007 is already -5% on original selling prices.

A lot of HTBers out in the shires will get truly scalped beyond whatever % movement the market makes because the developments they have landed in are horrible.

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6 hours ago, Andy T said:

:lol::lol::lol:   do you have one to sell ??? 

It has already been established that since HTB came along, new builds are 30% more expensive to buy than older properties, there is no HTB 'buffer'

I don't lol.

This was true a few years ago but when you now look at most new build sites and compare to older houses in the area, it's on par.

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1 hour ago, Scramz said:

I don't lol.

This was true a few years ago but when you now look at most new build sites and compare to older houses in the area, it's on par.

The new builds will have upped the selling prices in the area by 30% so the valuations on the older, better, bigger properties will have risen pro rata.

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The Times are now waking up to this, it's not terribly informative, but interesting it's on their radar.

https://www.thetimes.co.uk/edition/money/help-to-buy-opens-door-to-more-debt-for-first-wave-of-takers-mxbkjcxc6

"A flagship government scheme to help first-time buyers has left some homeowners owing more money to the state than they have gained from being in the property market.

Buyers in Co Durham, Sunderland and Rochdale who took advantage of Help to Buy loans are likely to owe the government more than they have gained from rising house prices over the past five years..."

They're still assuming all new builds have increased in value.

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32 minutes ago, Tulip_mania said:

The Times are now waking up to this, it's not terribly informative, but interesting it's on their radar.

https://www.thetimes.co.uk/edition/money/help-to-buy-opens-door-to-more-debt-for-first-wave-of-takers-mxbkjcxc6

"A flagship government scheme to help first-time buyers has left some homeowners owing more money to the state than they have gained from being in the property market.

Buyers in Co Durham, Sunderland and Rochdale who took advantage of Help to Buy loans are likely to owe the government more than they have gained from rising house prices over the past five years..."

They're still assuming all new builds have increased in value.

Because house prices only ever go up...

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