It's not clear from your posts - Are you saying you paid 10% out of your own savings at the contract signing and then the 90% - The Help to Buy amount at closing?
Just trying to understand.
I wasn't aware that it could be done that way. I thought the Help to Buy had to be claimed and paid out at the contract signing stage.
We paid 10% at contract signing.
The developer claimed the HTB after we finalised snagging, and when they received the money then the sent out the final paperwork.
The bank released the funds after confirming the HTB had paid out.
That's just what happened with our house purchase.
Thanks for clarifying.
I'll need to run our situation by the Revenue I guess.
Shouldn't you have got the HTB payment back then!?
EDIT: Ah OK, I guess because your LTV was less than 90% the HTB covered the difference?
At the claim stage, I gather you need to furnish Revenue with the signed contracts and signed loan offer from the bank.
What was the mortgage amount on the loan offer for those that have claimed it?
We would be at an LTV of about 85%, claiming the Help to Buy would bring us down to 80%. In our case does the loan offer we would provide to Revenue have to be specified at 80% LTV or 85% LTV? Does it matter?
I know you can't claim it at all if you're under 70% LTV.
The HTB doesn't change your LTV. Your LTV is the ratio of your mortgage to the value of the house and these figures are static regardless of whether or not you avail of the HTB. For example, you purchase your house for 400,000 and take out a loan of 350,000. Your LTV is 86% and you need a deposit of 50,000. The HTB reduces the deposit, but your LTV will always stay the same.
If you want to change your mortgage amount you'll need to do that with the bank, the bank don't deal with revenue.
Well assuming we can get our hands on it, it'll be another 5% of the purchase price we wouldn't have got otherwise. So we'll use it to reduce the mortgage by the corresponding amount, that's the plan.
Have you availed of it?
Well obviously that's the case, but that's not what I'm asking at all.
Lets take example numbers to illustrate:
New Build Price: 400k
Eligible Help to Buy Amount: 20k
Available Funds for Deposit: 40k
So the final mortgage amount will either be 360k (90% LTV without the HTB) or 340k (85% LTV with the HTB).
When you provide Revenue with the Loan Offer Letter from the bank, does it need to be 340k or 360k in the above example?
Yes, I'm currently going through the process.
In your example, you just pick whichever mortgage amount you want. If you want to borrow 360k and you are eligible for 20k from the HTB, then you just need to put 20k more in to the deposit and you can keep your remaining 20k for furniture or whatever. If you'd prefer to borrow less, then you apply for a mortgage of 340k, use 20k of the HTB towards the deposit and you put up the remaining 40k required.
So it's not really a case of which one should it be, it's whichever loan amount you want to apply to the bank for and that the bank has approved for you to borrow.
You will already be approved for the scheme before you send the contracts to Revenue as part of the claim stage, the loan offer you send should be the one you actually plan on drawing down - so if you want to use thr HTB to increase your deposit and reduce your mortgage you'll need a new loan offer.
Thank you both for your answers.
Crux of the issue for us is that the bank wants to see the developer registered on the list of Approved Contracters on the Revenue website before they'll reduce the amount on the Loan Offer.
Can you not just get a mortgage for the higher amount? You can always pay off a large chunk early if you leave a portion of your mortgage at a variable interest rate?
Yes, that's no issue - We already have the mortgage loan offer for the higher amount, as a contingency. It actually isn't that big of a deal if we can't claim it.
The developer we're buying from doesn't strike me as the most organized, if they're to advertise eligibility for Help to Buy, they really should have it all ironed out up front and be on that list.
Just wondering if someone could confirm if my understanding is correct.
I am purchasing for 225k at 90% LTV, I have 5% myself and am planning to use HTB for the other 5%. Do I pay my 5% at contract signing and then the developer will claim the other 5% from Revenue before the sale closes.
Also have people insisted on clauses being entered in the contract to account for the HTB claim being successful or is it certain to be paid out once the approval of the application has been obtained.
Your first question is the essence of what the scheme is for. To help first time buyers fund their deposit. However the developer is under no obligation to proceed this way and can request 10% deposit on sign off. You cannot claim your HTB grant without signed contracts. You need to clarify with the seller that they will accept what you are proposing, most will. If your developer isn't on the list of revenue developers or just a difficult company, you may need to get your own solicitor to push your case to proceed with the 5% cash and 5% HTB.