Help To Buy Equity Loan: Do I Have To Pay Interest Now?
Posted on 17th March 2020
What is a Help to Buy Equity Loan?
Any Solicitors in Preston will explain that in April 2013 the UK government released a scheme to help first time buyers and home movers get on to the property ladder. The scheme allows buyers to purchase a property with the assistance of an equity loan reducing the price of the house by 20%. As a buyer you would then have to secure a 5% deposit and a 75% mortgage which is why it has become easier for a first-time buyer to get on the property ladder.
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What happens once the Property has been purchased?
Once the property has been purchased the equity loan in registered against the property. For the first five years this loan is interest free.
What happens to my equity loan after five years?
Initially the scheme was only going to be offered to first time buyers for three years however the government made the decision to extend this period which resulted in more buyers utilising the assistance of the loan.
Any buyer who purchased their property with the Help to Buy equity loan five years ago or more will now be charged interest on a monthly basis. This means that may people now have two payments going out of their monthly budget: one for the mortgage and one for the loan on the property.
How do I repay my Help to Buy equity loan?
For starters you will need to instruct both a Surveyor to value the property and a Conveyancing Solicitor. Don’t worry, local Solicitors in Preston MG Legal can help!
If you can repay the loan back to the government through personal savings without selling the property, this would stop the interest having to be paid on the loan. Your local Solicitors can help to arrange you paying the money back.
Alternatively, you may wish to remortgage the property so that both loans are consolidated in to one loan and, you guessed it, property law Solicitors can help with this too!
Can I sell my home if I bought it with a Help to Buy equity loan?
Of course, you can, you would just need to repay the loan from the sale proceeds. You should note that you will still need a surveyor to carry out a Valuation for the government. Don’t worry a local Conveyancer will be able to guide you through the process.
Our residential conveyancing team based in Lancashire are highly experienced in this area and are more than happy to assist any clients who would like to repay their Help to Buy equity loans early. Contact us now via enquiries@mglegal.co.uk or call 01995 602 129.
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Tagged as: Conveyancing Solicitors Longridge, Lancaster Law, Preston Property Law, Your Local Solicitors
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