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Help to Buy Remortgage

A Help to Buy Remortgage lets you switch your loan to a better deal.

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Help to Buy remortgage

A help to buy remortgage is when you increase the amount of borrowing to repay the equity loan that you took out when you bought your home. The amount you owe on the loan will have likely changed since you bought your property as it’s a percentage of its value, i.e., 20% (40% in London).

There are lots of hurdles to face along the way, both with your new mortgage lender and the legal process. It’s always best to have a mortgage advisor for guidance and support.

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Remortgage to pay off Help to Buy options

You can start your remortgage process with us 6 months before your help to buy mortgage deal ends. Depending on the current value of your property and affordability you have 3 main options when considering a help to buy remortgage.

  1. Take out a new mortgage (or use savings) to repay the equity loan in full so you own 100% of the property.
  2. Repay part of your equity loan, note that the minimum you can repay is 10%. This is called ‘staircasing’.
  3. Do nothing and keep the equity loan, this can be repaid via savings or sale in the future.

Most clients prefer ‘option 1’ however, we’ll explore all of these in more detail further on the page.

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The Help to Buy remortgage process

Most help to buy mortgage customers took out 5-year fixed rate deals to coincide with the interest-free equity loan period. 6 months before your fixed rate ends is the perfect time to explore your options and start the ball rolling.

As part of your free, no-obligation mortgage consultation, your mortgage advisor will explore your options and let you know how much your new monthly repayments will be so you can decide if to repay the loan.

If you decide to repay it, most clients do this for peace of mind, our mortgage team will also help you progress any valuation and legal work involved.

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Help to Buy Remortgage FAQs

How much do I owe on my help to buy equity loan?

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The equity loan settlement is worked out based on the value of the property at the point you want to pay it off.

The value of the property is set by an independent valuation carried out by an independent surveyor who is certified by the RICS (the Royal Institution of Chartered Surveyors).

You do not need to seek permission to repay the loan, but if you are only remortgaging to pay off part of the loan then you will need to seek permission to increase the mortgage or change mortgage provider.

The cost of the surveyor is met by you and must be provided in a set format, you cannot just ask a local estate agent to value the property.

The surveys are only valid for 3 months so you will need to apply for the remortgage right away if you want to go ahead so that it doesn’t expire.

Once you have the valuation figure, you need to complete a loan repayment application form, send in the valuation report and pay an admin fee.

You will then receive back a redemption figure so you know exactly the amount to repay.

Don’t worry, you can apply for your help to buy remortgage on an estimated figure which can be changed prior to completion by us if it turns out to be slightly wrong.

Should I seek advice for my help to buy remortgage?

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Borrowing more money on your mortgage to repay your equity loan may bring you peace of mind that the debt will no longer be rolling up if your home is increases in value.

As part of our remortgage advice service, we’ll approach your existing lender on your behalf to see if they will consider increasing your mortgage and this is known as a further advance mortgage.

One inconvenience of a further advance is that you may end up with an interest rate that is different the that of your original mortgage and the end date of the product (e.g. fixed rate) will be different also.

This means you could have two “sub accounts” attached to your mortgage and remortgaging to a new provider in the future is made trickier.

Many people therefore prefer to apply for the additional funds around the same time that their deal is ending.

When you change lender to secure the cheapest deal available this is known as a remortgage and only one rate of interest will be charged across the whole mortgage.

You might not want to go to the expense of paying out for the survey if you are nervous whether you will be granted the mortgage, so we are happy to apply for a mortgage agreement in principle ahead of time free of charge to give you more confidence to proceed.

Being a reputable mortgage advisor, it’s our job to ensure that you fully understand the features and benefits of a remortgage to repay an equity loan before you apply.

Our mortgage brokers have access to 10,000’s of remortgage deals, so we’re able to shop around on your behalf, saving you both time and money.

How does the legal process on a help to buy remortgage work?

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Homes England will send your chosen solicitor (don’t worry, we can help you with this) a list of the things required to be put into a “legal undertaking”. This is a formal legal agreement.

If you are looking to repay your help to buy equity loan in full then you must not be in arrears with any fees, charges or arrears on your account.

Once Homes England receive the legal undertaking from your solicitor, they will send out an “authority to complete” within 5 working days. Once this is done the equity loan can be cleared.

If you are not paying off the full amount of the equity loan, there are some additional steps Home England need to take before the authority to complete can be issued and you will need to seek their permission to increase your mortgage.

On the day of completion, your solicitor requests the funds from the mortgage lender and transfers the funds over to repay the equity loan. The settlement figure will include all interest charges, arrears, and fees payable.

Once everything has gone through you will receive a completions statement and Homes England will remove their legal charge from your property.

Can I still repay my help to buy equity loan if I’m aged 50+?

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Yes, sure. We offer remortgage advice for all ages! Mortgage lenders have been very creative with their products in the later life space over the last few years.

There are lots more options for older clients these days, including regular mortgages up to the age of 85 and retirement interest only mortgages.

What are risks of a help to buy remortgage?

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The risks of a remortgage include under-estimating the fees payable, having to pay back a higher rate of interest and falling into negative equity in the future if the value of your home reduces.

This is why seeking great remortgage advice is important.

It’s a complicated application and your mortgage broker will need to consider which product/s are best for you, I.e., a further advance, a remortgage, a second charge mortgage/secured loan or, for older clients an equity release/lifetime mortgage.

These are just some of the risks involved, it’s our job as trusted mortgage advice experts to run through all the risks involved based on your personal situation.

How do I choose the right remortgage deal for to repay my equity loan?

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With your new mortgage, there’s a lot to consider such as your current mortgage interest rate, whether you are part way through a fixed rate, how much equity you have, your future financial plans, your affordability and income type and attitude towards risk.

Having a reputable mortgage broker, like us, on your side will ensure you are getting the best possible advice and that you’ve shopped around 1,000’s of deals and got the best one for your individual situation.

What documents and information do I need to provide when applying for a help to buy remortgage?

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Standard documents such as 3 months proof of earnings, ID and 3 months bank statements, are required for a remortgage to repay your help to buy equity loan, plus the RICS survey report if available.

It’s normal for other ad-hoc documents may be requested during the application process; this will vary by lender.

Also, as part of your free consultation, we’ll ask you some questions that include basic personal information like name, address, salary, and any existing credit/mortgage details, plans for the home etc.

This information will allow your mortgage advisor to answer all your questions accurately.

How long does a remortgage to repay the help to buy equity loan take to go through?

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Generally, the full process takes about 3 months. Although, the length of time does vary per mortgage lender.

Our mortgage broker team aim to have secured you a mortgage offer within approximately 3 weeks; the rest of the process is in the hands of your solicitor and Homes England.

What is the difference between a fixed-rate and variable-rate mortgage to repay your help to buy equity loan?

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Most clients prefer a fixed rate mortgage deal, typically over 2, 3 or 5 years depending on their personal situation and attitude towards risk.

Clients usually like the security of knowing exactly how much they are paying per month for budgeting purposes.

A variable rate mortgage maybe recommended by our mortgage team in certain individual situations, such as if you feel interest rates could come down.

Can I remortgage to repay my help to buy equity loan with bad credit?

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Bad credit such as a ccj, default, missed payments or simply a low credit score are usually hurdles that we can overcome, even when doing a help to buy remortgage application.

It’s usually harder and you’ll need a great mortgage advisor on your side, however, it is possible to remortgage with bad credit.

What are the associated costs and fees for remortgaging to repay your help to buy equity loan?

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The fees associated with a remortgage to repay your help to buy equity loan, include new mortgage arrangement fees, valuation fees, legal fees, and potentially early repayment charges if you’re in a fixed rate deal.

Your mortgage advisor will run through all these with you upfront, so they’ll be no surprises along the way.

Can I remortgage to pay off my equity loan if I’m self-employed?

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Yes, although there can be more hurdles to jump along the way. Whether you are a sole trader, a partnership, or a limited company owner, with a minimum of one year’s trading you’ll have help to buy remortgage options. It’s usually harder with a self-employed mortgages compared with an employed one. If you are self-employed, a reputable mortgage broker’s help will prove beneficial throughout the process.

What are the alternatives to a remortgage to repay a help to buy equity loan?

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You don’t need to remortgage to pay off your help to buy loan. There are alternatives such as borrowing money from family or using your savings to repay the equity loan should be considered if possible.

If you’re happy with the government owning 20% (40% in London) of your home and making the loan repayments, you can also keep things as they are. Maybe look at this again in the future when your personal situation is different.

Also, you can sell your home, repay the loan, and buy a cheaper property.

8 Reasons to Choose UK Moneyman

Help to Buy Remortgage Advice, 7 days a week.

We work around you and your busy lifestyle. Choose an appointment time that suits you.

Free remortgage review, we don't ask for upfront fees.

We only ask for a payment on results.

Everyone gets given a loyal case manager.

Your case manage will be with you every step of the way.

We care, on getting you the best result.

From start to finish we will be with by your side. We understand how remortgaging works and understand the market inside and out.

Going the extra mile to make sure you have the right cover and insurance.

We like to make sure that everyone is covered with the appropirate insurances, protection them and the ones you love.

1000s of help to buy remortgage deals.

Our team of mortgage advisors can look through 1000's of remortgage deals to find you the most suitable product.

We've been in the industry for over 20 years you are in safe hands.

We are able to take a look at thousands of different help to buy remortgage products to determine which deal would be most suitable for you.

Your mortgage advisor will support you every step of the way.

Overcoming hurdles that you face along your remortgage journey.

Help to Buy Remortgage Options Explained

Option 1 – Repay the equity loan in full

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Repaying the equity loan in full will allow you to retain 100% ownership of your property. You can repay the loan using cash from savings of family gifts etc. If you don’t have the cash available, you can also repay the equity loan using funds from a mortgage, either a new help to buy remortgage with another lender or taking a further advance from your existing lender. We’ll help you compare the cheapest option for you here.

Most clients who utilised the help to buy mortgage scheme took out a 5-year fixed deal to coincide with the interest-free period of the equity loan. If you’re looking to repay the equity loan using a mortgage, 6 months before your current fixed rate ends is the perfect time to start getting mortgage advice and reviewing your options.

Option 2 – Repay a minimum of 10% of the equity loan

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If option 1 isn’t possible or you’re not able to raise the additional money via a mortgage due to a change in your personal situation. You can repay 10% of the equity loan via a lump sum payment. This is called staircasing.

You’ll still need an open market valuation etc as above. The remaining 10% will be repaid as per the terms of the initial contract, usually after 25 years since purchase or from the sale of your home or future remortgage.

You’ll continue to pay interest on the 10% equity loan that you have left, the interest rate will increase every April.

Option 3 – Leave everything as it is

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If option 1 and 2 are not viable for you at this time, you can leave things as they are for now and address the help to buy remortgage in the future.

Providing that you are meeting the terms and conditions of your loan and making the payments, you can carry on for the duration of the term which is usually 25 years.

At the end of the term, the loan will need to be repaid in full.

The government will continue to own 20% (40% in London) of your home, therefore benefiting from any future increase in value. The government will also be receiving your monthly interest payment, with a rate that increased every April.

If you are looking to keep your existing help to buy mortgage, you might find shopping around for a new rate more restrictive due to lending criteria. Nothing an experienced mortgage broker can’t handle though!

We search 1000s of help to buy remortgage deals

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