Help to Buy Repayment

Can I pay off my Help to Buy loan by remortgaging?

You can start the Help to Buy Redeem process without having to sell. This process covers if you don't sell the property, but do settle in full the loan (normally through a remortgage, further loan or personal savings).

1
Obtain a RICS valuation for the property.
2
Send Target your valuation, solicitor's details and pay your Administration Fee.
3
Target confirm in writing if they approve the valuation and how much you need to pay to redeem the loan.
4
Solicitor handles the rest of the legal work to redeem the equity loan including ID checks, obtaining redemption statement and handling completion.

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Can I sell my house if I have Help to Buy?

You can sell the property that the loan is secured over. However, it is important to remember that you will then have to repay the loan in full regardless of whether the property has gone up or down in value. The loan repayable is calculated as the loan percentage of either the current market value or the agreed sale price (whichever is higher).

In order to sell your property you will need to:

1
Obtain a RICS valuation for the property.
2
Send Target your valuation, solicitor's details and pay your Administration Fee.
3
Target will then confirm in writing if they approve the valuation and how much you need to pay to redeem the loan.
4
Your Help to Buy Redemption Solicitor handles the rest of the legal work to redeem the equity loan including ID checks, obtaining redemption statement, providing undertaking to Target, obtaining authority to proceed and handling completion.

Example of the value to repay the loan

Your loan at the outset was 20% of the purchase price of £250,000 then the loan value at that time was £50,000. When you sell you agree a sale price of £300,000 which means the value to repay the loan is 20% of £300,000 which is £60,000.

Staircasing your Help to Buy Repayment

Help to Buy Staircasing allows you partially redeem your Help to Buy equity loan, while at the same time getting to own more equity of your home. For more in-depth information on this topic, you can read our article - Help to Buy Staircasing.

1
Obtain a RICS valuation for the property.
2
Send Target your valuation, solicitor's details, confirm the % your are staircasing and pay your Administration Fee.
3
Target confirm in writing if they approve the valuation and how much you need to pay to settle your share of the loan
4
Your Help to Buy solicitor handles the rest of the legal work to partially redeem the equity loan including ID checks, obtaining redemption statement and handling completion.

Example of the value to repay the loan when staircasing

Your loan at the outset was 20% of the purchase price of £250,000 then the loan value at that time was £50,000. When you staircase you agree a property valuation of £300,000 and to staircase 10% which means the value to repay the loan is 10% of £300,000 which is £30,000.

What are the requirements to staircase a Help to Buy loan?

• The minimum amount you can staircase at one time is 10% (of the total market value of the property at the time you staircase);
• The above requirement means that, when the lenders’ equity in your property is less than 20% you can only repay the loan in full;
• You may only staircase in multiples of 10%, that is 10%, 20%, 30% etc; and
• You cannot staircase if there are any arrears of interest payments and/or management fees on your mortgage account. Any arrears must be cleared, before a staircase transaction can proceed.

How do you repay Help to Buy?

• Remortgaging
• Personal savings, a further loan or a gift from family
• Selling your property

What are the requirements for the RICS valuation surveyor?

• The Valuer must be registered with the recognised qualification of RICS;
• The Valuer must be independent to an estate agent;
• The report must be on headed paper, signed by the RICS surveyor and addressed to Target HCA;
• The Valuer MUST provide at least 3 comparable properties and sale prices;
• The comparables provided must be like for like in terms of property type, size, and age and within a 2 mile radius to the property that is being inspected;
• The Valuer must not be related or known to you;
• The Valuer must inspect the interior of the property and provide a full valuation report;
• Valuations carried out for bank or mortgage purposes are not acceptable; and
• A copy of the valuation report must be supplied to Target; the inspection date must be shown on the report.

Help to Buy Solicitors Fees

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