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Home / Mortgages / Help to Buy Mortgage / Remortgaging
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Help to Buy Remortgage Advisors & Brokers in Milton Keynes

Understanding remortgaging with the Help to Buy Equity Loan Scheme

Remortgaging with Help to Buy

As with all mortgages, it is recommended that you review your mortgage product on a regular basis to ensure that you have the best mortgage product available to you. You can do this by remortgaging.

Remortgaging happens when you change the mortgage you currently have on your property, either by switching it to a new lender, or by moving to a different deal with your existing lender.

This is equally as important when you have a Help to Buy equity loan, although you may find your Help to Buy remortgage options to be a little more restricted.

6 years into the scheme, more and more people are either approaching the end of their initial mortgage term, or coming up to the 5 year anniversary to start making interest payments on the loan. This means that these people are now faced with the prospect of higher monthly outgoings unless they take action.

Remortgaging with Help to Buy could allow you the opportunity to not only enjoy the best market rates, but also to consider borrowing additional funds to repay some of all of your equity loan. We at Mortgage Light can help and guide you through this process.

About the Help to Buy Equity Loan Scheme

The Help to Buy Equity Loan Scheme was launched by the government in 2013 and has since gone through a number of changes. In 2021, the scheme became exclusive to first-time buyers only, and now enforces regional price limits.

This means that buyers can only use the scheme to purchase a home costing no more than the specified property price cap in their region. This is to ensure that the scheme reaches the people who need it most.

The regional price caps are as follows:
Regional price caps:

  • North East - £186,100
  • North West - £224,400
  • Yorkshire and the Humber - £228,100
  • East Midlands - £261,900
  • West Midlands - £255,600
  • East of England - £407,400
  • London - £600,000
  • South East - £437,600
  • South West - £349,000

In order to be eligible for the Help to Buy Equity Loan Scheme, you must tick the following boxes:

  • You must be a first-time buyer
  • You must be purchasing a new build from a registered Help to Buy builder
  • You must be purchasing a new build costing no more than your regional price cap
  • The new build must be the only property you own and your main residence

To use the scheme, you must put down a minimum 5% cash deposit on a new build property. As part of the scheme, you are then eligible for an equity loan (provided by Homes England) of up to 20% to make up the rest of your deposit. In London, this figure is 40% due to the higher house prices. The remaining 75% (or 55% in London) of your property purchase is funded by a personal mortgage.

Paying back the Help to Buy equity loan

You can pay off the equity loan at any point, paying either 50% or 100% of the outstanding equity loan sum, however when doing this it will usually incur a fee. In London where the Help to Buy loan is up to 40% of the purchase price, you are able to pay off 10% increments of the equity loan.

The government requires the loan to be paid off in a cash lump sum. This could be money gifted to you, inheritance, savings, a bonus or through remortgaging. A Help to Buy remortgage is the most common way to pay off the loan for most people, however the process is not as straightforward as with a general remortgage. Even finding the right lender can be more difficult, as not all lenders will accept remortgage applications to pay off the Help to Buy loan and those that do, have additional restrictions regarding the amount of equity that is in the property. 

This is where we can help. As specialists in Help to Buy mortgages and Help to Buy remortgages, we have access to the whole of the market and can hand hold you through every step of the process.

Your remortgaging options

Essentially, you have three options available to you to consider:

  • Option one

Transfer your existing mortgage to a new product and/or lender and keep your full equity loan. Not all mortgage lenders will fund alongside the equity loan scheme and so you may find yourself a little restricted. 

  • Option two 

Arrange a remortgage for a higher amount to repay your existing mortgage and all of the equity loan, thus giving you full ownership of your property. This is the most common way to pay off the equity loan. 

  • Option three 

Arrange a remortgage for a higher amount in order to repay your existing mortgage and partially repay your equity loan. Again, the mortgage market for this option is limited, so you may struggle to get the deal you want. 

REMORTGAGE PROCESS

  • Set a time to speak to Mortgage Light Remortgage Team
  • Mortgage Light will do all the do relevant checks to ensure the Remortgage is affordable, and then upon receipt of relevant documentation from yourselves we will be able to provide you with an AIP/DIP
  • Instruct a RICS Valuation, you will need to pay for this upfront – don’t worry Mortgage Light can advise you how to do this.
  • Mortgage Light will submit your application to the lender
  • Appoint solicitor – Mortgage Light can help by providing you with details of specialist solicitors who deal with Help to Buy Remortgage.
  • Valuation will be instructed by the lender
  • Contact Help to Buy to advise them that you wish to repay the equity loan, they will then send a upto date loan settlement figure to the solicitor. Again Mortgage Light can advise you how to do this.
  • The documentation that the lender requested will be assessed
  • The mortgage offer will be issued and a copy sent to yourselves and your solicitor
  • Set a time to meet or speak to Mortgage Light to review your mortgage offer and discuss your protection needs.
Can I remortgage with Help to Buy if I am self-employed?Expand

Yes, being self-employed should not prevent you from remortgaging your Help to Buy loan. It’s the same process as when you remortgage generally when self-employed - you will just have to provide evidence of your finances in a slightly different way.

Should I pay off my Help to Buy mortgage early?Expand

It’s not realistic for everyone but if you can, it makes sense to pay off your Help to Buy loan early depending on the market conditions.

How long does Help to Buy remortgaging take?Expand

Remortgaging with Help to Buy generally takes a little longer than a standard remortgage application. You’ll probably be looking at 8-12 weeks, so make sure you time it right.

How can Mortgage Light help?Expand

Remortgaging with Help to Buy isn’t always easy and straightforward - but that’s why we’re here. As specialists in Help to Buy, we have the answers to your questions and are here to support and walk you through each step of the process. If you’d like to have a chat with one of our experts about remortgaging your Help to Buy equity loan, get in touch with us.

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Free Initial Consultation

All of our brokers deal with the whole of the mortgage market. It doesn’t matter what the question or when you want to speak to us, we have brokers available on the phone or face to face seven days a week. Whether you are just thinking of buying a home and have no idea where to start, a seasoned investor or someone looking to better your current mortgage product, we are happy to help andchat over ideas free of charge.

So we can give you plain and simple advice we will run through some basic questions to help us tailor products to suit your needs. Upon us taking your application forward we will write to inform you that we have given you advice and give you a Key Facts Illustration breaking down the important elements of the product and the fees involved.

For us to take your application forward to a lender we charge an upfront administration fee of £349. For our returning customers looking to renew their mortgage product this fee reduces to £199. We also receive commission from the lender.

A fee of £349 is payable on application of the mortgage. We will receive commission from the lender in addition to the fees you pay. Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage. As with all insurance policies, conditions and exclusions will apply.
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