The Help to Buy Repayment Process and the Help to Buy Loan Repayment Calculator
In this article our conveyancing solicitors outline the help to buy repayment process. We also provide a really useful help to buy loan repayment calculator.
If, after reading ths article, youhave further questions please get in touch. Our specialist help to buy solicitors are always happy to help.
What is the Help to Buy Scheme?
Help to Buy was a scheme that was launched in April 2013 by the government which aimed to help first time buyers onto the property ladder by providing an interest-free loan worth up to 20% of the value of their property.
When does the Help to Buy scheme end?
The Help to Buy Equity Loan closed to new applications on 31 October 2022 and has ended on 31 March 2023. Homebuyers must have legally completed the purchase of their home by 31 May 2023 to be eligible for an equity loan.
Who do you repay Help to Buy equity loans to?
Target were originally resposnsible for managing loan repayemts but no longer manage the servicing of Help to Buy loan of June 2023. Subsequently, a new service provider, Lenvi (previously Equiniti Gateway Services) has been appointed to oversee this function by Housing and Communities Agency. Lenvi are responsible for collecting the Help to Buy repayment and are the people who will need to be contacted to let them know you want to repay the loan. Lenvi will require you to get advice from our solicitors who will deal with the repayment of your loan on your behalf. Starck Uberoi’s team of experienced conveyancing solicitors can help. Our solicitors will liaise with Lenvi throughout the process and our solicitors will explain the process to you so that you are aware of what is happening at each stage. Once repayment has been completed it is Lenvi, will inform the Land Registry to remove the equity charge secured against the Title Registers for your property. However, our solicitors will check with the Land Registry to make sure that the charge has been removed and we will then provide a copy to you.
What is Lenvi’s Help to Buy repayment process?
Lenvi list a number of steps you need to follow on their website when repaying your Help to Buy loan:
- You will need a valuation of the property to be conducted by a surveyor and this report will need to be sent to Lenvi.
- You will then need to confirm where the money is coming from to repay the loan.
- Our solicitors will then begin any legal conveyancing work
- The loan repayment form will then need to be completed and returned to Lenvi
- Once the form, administration fee and valuation are approved by Lenvi we then receive a redemption letter
- Our solicitors will then deal with the legal matters checking for any issues
- Lenvi then issue an authority to complete and our solicitors will complete the transaction sending through the redemption money to Lenvi upon completion.
How do our solicitors deal with repaying Help to Buy equity loans with Lenvi?
There are three ways to go about Help to Buy repayment:
Repaying Help to Buy Equity Loans on sale
- This is where the borrower pays back the loan in full as you can transfer the loan to a mortgage on a new property.
- The loan amount is 20% of the current market value of the property or an agreed sale price, usually it will be whichever of the two is higher
- This option is good in the circumstance that your house value has increased since the property was first purchased and you avoid having ton pay interest on the equity loan in the future
For more information regarding repaying your Help to Buy loan please visit Lenvi’s website.
Repaying Help to Buy Equity Loans without selling
This is where the borrower will pay back the loan in full but they do not take out another loan to help pay off the loan.
- The repayment value is then often a percentage of the current market value of the property
Repaying Help to Buy Equity Loans gradually with Staircasing
This option is slightly more complicated in that there are two possible ways of doing it either they can:
- Pay back the Help to Buy loan in part without taking out another loan
OR
- Repay the Help to Buy loan in part by securing another loan with a different lender
Can you repay your Help to Buy Equity loan by remortgaging?
If the property has increased in value over the last five years you may choose to remortgage your property and release equity from the property itself in order to pay off the government loan. You can either pay off half of the Help to Buy loan – 10% or you can choose to pay off the full 20% However, when you do pay off the Help to Buy loan you must ensure that you pay the government either 10% or 20% of the current property value If the circumstance is that your property has increased in value over the years since it was first purchased you will have to pay slightly more to the government however, this value is dependent on how much the value of the property has increased You should check whether your lender will remortgage the property onto another product as not all lenders offer this service. Starck Uberoi Solicitors can assist you with your remortgage as smoothly as possible by ensuring that we meet your lender requirements and protect you and your lender’s best interests. We are on more than 50 lender panels such as Barclays, HSBC, Santander, Halifax, Natwest and many more.
What will replace Help to Buy Scheme?
- The government’s mortgage guarantee scheme was launched in 2021 after the pandemic meant lenders retracted all 95% mortgages.
- The government offers lenders a guarantee to encourage them to lend again
- You will need to ensure the property you are buying is less than £600,000 to access the mortgage guarantee scheme.
- Our in house mortgage broker, Starck Uberoi Wealth, guide you through your options and find the best deal for you.
- This scheme is due to end in December 2023.
- This scheme works by offering newly built homes to local first time buyers with a discount of at lest 30% compared to the market value of equivalent properties
- Homebuyers can save on average £70,000
- This discount stays on the First Home forever interpretating that every time the property is sold, the new buyer benefits from the discount,
- Designed to encourage people to save for their first home or their retirement
- Anyone aged 18-39 can open an account and save up to £4,000 each tax year
- The government will then give you a 25% bonus on your contributions, up to a maximum of £1,000 per year.
Help to Buy Loan Repayment Calculator
Disclaimer
This Help to Buy Repayment Calculator is provided for general information and guidance purposes only. While every effort has been made to ensure the accuracy of the calculations, no guarantee, warranty or representation is made as to their accuracy or completeness. The figures produced do not constitute legal, financial or tax advice and should not be relied upon as such.
Before taking, or refraining from taking, any action based on the results, you should seek independent professional advice. Neither the provider of this calculator nor any associated parties accept any liability for loss or damage arising from reliance on the results.
Why choose Starck Uberoi Solicitors
Starck Uberoi Solicitors are your trusted partners throughout the conveyancing journey. With a wealth of experience and a commitment to excellence, they offer several compelling reasons to choose their services:
- Expertise and Experience: The team at Starck Uberoi Solicitors boasts extensive experience in conveyancing. Their in-depth knowledge allows them to navigate complex transactions from start to finish with ease, ensuring a smooth process.
- Personalised Service: Understanding that each client’s needs are unique, Starck Uberoi Solicitors provide tailored solutions that cater to your specific requirements. They keep you informed at every step, offering guidance and support throughout the process.
- Efficiency and Timeliness: Recognising the importance of a timely transaction, Starck Uberoi Solicitors work diligently to expedite the conveyancing process while maintaining the highest standards of quality and accuracy.
Additionally, our sister company, Starck Uberoi Wealth, has a team of mortgage advisors with broad knowledge of the mortgage market, including the best alternatives for Help to Buy Schemes. They can recommend the best products for your circumstances and advise you on your financial situation to give you support to aid your purchase or remortgage. To book an appointment with a conveyancing solicitor, please call 020 8840 6640 or email solicitor@starckuberoi.co.uk. To book an appointment with a mortgage advisor, please call 020 8037 4027 or email info@suwealth.co.uk. Our offices are based in Brentford, Ealing, Richmond, Canterbury, and London Victoria, and are all easily accessible via public transport. Our partner, Raminder Singh Uberoi, can also provide a Notary Public service at any of our offices.
