BLOGS

The Help to Buy scheme was introduced to enable people to purchase a new home with only a 5% deposit. The government would then make up the difference of 20%. The loan was interest free for 5 years. After this time, interest is 1.75% and will rise in line with Retail Price Index plus 1% year on year.

The first Help to Buy scheme has now been running for over 5 years. This means that lots of people have started paying interest on the loans. For many people, paying the interest on this loan as well as paying their mortgage may not be desirable. Lots of people are choosing to repay their loans rather than selling their property and moving home. To do this, you will need a solicitor. We are here to help do this.

There are three ways that a Help to Buy loan can be repaid.

Lump Sum Payment: This figure could come from savings that you may have built up or have been given to you by a third party to be used to pay off this loan

Further Advance: Sometimes, your lender will agree to advance (loan) you further monies to pay off this second charge on your home. This will need to be applied for by yourself of a mortgage broker on your behalf. This will affect the monthly repayments on your mortgage as you will now owe them more money.

Remortgage: If you are not able to get a further advance from your current lender or are able to get a more favourable rate from another lender. In this instance, re-mortgaging may be a more favourable option. Again, you will need to apply for this yourself or ask a mortgage broker to get a this arranged for you.

Once you have decided the best way forward for you to proceed and you have got the ball rolling on mortgage applications if applicable, you will need to contact Help to Buy. They are known as Target. You will need to get your property valued by way of a RICS valuation. This is a specific type of valuation that is required for Target to establish the value of your home. This valuation will need to be sent to Target along with an administration fee. Once you have done all of this, that is where we come in.

When you get a redemption figure from Target, we will need to write to them and confirm some information, they will then issue us with an Authority to Complete. Once we have this, we are able to proceed to repay the charge once we have received the relevant documents to confirm funding.

On average, it can take 4-6 weeks from instruction to completion and paying off the charge. Once we have made payment to Target, it can take a further month to see this charge being removed from the title at the Land Registry, we will obtain an updated copy of the title to confirm this has been removed as soon as we are able to.

Costs for our legal fees start at £500.00 plus VAT and disbursements. This fee will change depending on the complexities of the funding that you are using to pay off the charge.

If you have queries in relation to repaying a help to buy loan please do not hesitate to contact Victoria Brewer, Conveyancing Executive by email to Victoria.Brewer@pardoes.co.uk or telephone on 01823 446207 or for a no obligation quote, please call our residential team on 01823 446207