# Help to buy scheme



## Zetec-al (Feb 28, 2011)

Just wondering if anyone has used the help to buy scheme when buying a new build home.

Does it suit you?

Pros and cons?

Let me know your thoughts!


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## Starbuck88 (Nov 12, 2013)

I'm interested in this also.

From what I can tell, I'm worried about the way you have to pay the loan back in such large amounts when it's due...


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## danwel (Feb 18, 2007)

Yes i have just bought mine and moved in 3 weeks ago.

The way i was sold it there is no cons. look at it as an interest free loan for 5 years and then at the 5-7 year point re mortgage and pay the government off.

Or failing that at the 5 year point if you have the cash saved the you can buy them out at that point.

the help to buy scheme worked for me also in that it allowed me to keep my existing rate with my current lender at base rate plus 2%

i have to be honest i was rather reluctant to accept the help to buy scheme and even after my financial advisor told me it was the way to go i was reluctant and did more homework into it as i thought it was for people who couldn't afford the house initially and needed help of which i didn't.


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## cole_scirocco (Mar 5, 2012)

We thought about it and enquired about it however turned to be a waste of money eye with all of the interest added on top.

So we dug around for a 10% deposit and bought outright.


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## Nanoman (Jan 17, 2009)

I just wonder what deals you'll get offered when you come to remortgage. What if you can't find anyone to give you a mortgage? Lose your home?


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## danwel (Feb 18, 2007)

Nanoman said:


> I just wonder what deals you'll get offered when you come to remortgage. What if you can't find anyone to give you a mortgage? Lose your home?


That was something i checked on at the time. i was able to get a mortgage for the full amount thankfully so had the option. obviously the deal wasn't as good due to it being a larger loan and less lenders willing to lend to me so higher interest rates too.

Also should have added i actually had a 10% deposit but unsure as to whether or not you can do this with a 0% deposit but sure i saw minimum of 5%.

Like everything there will be good and bad things said so my advice is to speak to a financial advisor and do your own homework too as that is what led me to my conclusion


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## Nanoman (Jan 17, 2009)

But what happens in 5 years if you don't have the cash to pay the help to buy portion off and no-one will give you a mortgage?


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## danwel (Feb 18, 2007)

Nanoman said:


> But what happens in 5 years if you don't have the cash to pay the help to buy portion off and no-one will give you a mortgage?


Well they would give me a mortgage for the full amount now so i see no reason why they wouldn't in 5 years but that said stranger things have happened.

You don't have to buy the government out in 5 years you can just keep going but after 5 years it stops being interest free and the interest rises each year. Not massive amounts but by a very rough calculation it would be circa 8 years before it stopped being cost effective.


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## Nanoman (Jan 17, 2009)

danwel said:


> Well they would give me a mortgage for the full amount now so i see no reason why they wouldn't in 5 years but that said stranger things have happened.
> 
> You don't have to buy the government out in 5 years you can just keep going but after 5 years it stops being interest free and the interest rises each year. Not massive amounts but by a very rough calculation it would be circa 8 years before it stopped being cost effective.


Ah. OK. I didn't know if you had any other options after 5 years.


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## danwel (Feb 18, 2007)

Nanoman said:


> Ah. OK. I didn't know if you had any other options after 5 years.


You can carry it on for the life span of the mortgage but obviously at some point the interest on the help to buy scheme will be higher on what deal you can get on a mortgage so at that point that would be the time to re-mortgage imo.

my plan all being well is to pay my help to buy part off at the 5 year point but things may well change in terms of my financial position


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## footfistart (Dec 2, 2013)

Sorry to jump in but is this on new builds or existing homes? I'm looking to buy soonish after sorting out some bits and bobs. There is a lot more to choose from when it comes to existing homes. I would go for new build but I want at least two beds. A new build round my wayish ( farnborough) is 200,000 for a one bedroom house and a two is anything above 250k! 

I can't justify that. If I look hard enough I can get a three bed for 200k. 

There are a lot of schemes out there with pros and cons it's hard to choose. Go see an advisor which is what I'm doing this weekend to see what I can get and see what's in it for me. I hate renting.  I Want to buy but getting a deposit to buy outright is impossible so help to buy is the way into it.


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## adlem (Jul 6, 2008)

The issue with the help to buy is that if you don't have the cash to pay the government loan of 20% you start paying interest on 20% of the current value (not what you bought it for) and the amount of interest increases each year. If house values have gone up, you'll owe more.

I think there will be quite a few issues down the line and repossessions when the 5 year period is over and people struggle with the payments but we'll see 

I'm not saying you Danwel, that's just my fears for the future


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