Can I Move House with a Help to Buy Equity Loan?
Moving home is a significant life event, and if you’ve purchased your current property with a Help to Buy equity loan, you might wonder about the implications of moving.
The Process of Moving
When you decide to move, the equity loan needs to be repaid. This repayment can be from the sale of your home or another funding source if you’re not selling immediately. The amount to be repaid is based on the current value of your home, not the amount initially borrowed.
Selling Your Property
- Valuation: Before selling, your property needs to be valued to determine the amount owed on the equity loan.
- Repayment: Upon sale, you’ll repay the equity loan percentage of the current home value, which could be more or less than the initial loan amount, depending on whether your property’s value has increased or decreased.
Buying a New Home
- New Equity Loan: The Help to Buy scheme is now closed and the scheme can not be used for new property purchases.
- Alternatives: It is possible now to buy a new home with other schemes, such as the Mortgage Guarantee Scheme which allows a low deposit option. However, if your property increased in value and you released equity with the sale, this may enable a standard purchase with a reasonable deposit to access competitive mortgage deals.
- Early Repayment: If you’re not selling your home but wish to move, you can repay the equity loan early. This option requires financial planning, as you’ll need to have the funds available to cover the loan amount.
- Changing Property Values: The amount to repay can increase or decrease, reflecting changes in your property’s market value.
- Fees and Charges: Be aware of any fees associated with repaying your equity loan, including valuation fees and any legal costs.
Seeking Professional Advice
Navigating the process of moving when you have a Help to Buy equity loan can be complex. It’s advisable to consult with a mortgage broker or financial advisor to understand your options and obligations fully. They can provide tailored advice based on your circumstances and the current property market.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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