Help To Buy LTV

CantThinkOfANam wrote: »

Hi all,

Currently planning on purchasing a house as a first time buyer. I wanted to get a 50% mortgage and pay for the rest with savings I have.

However I’ve just realised that I need a LTV of greater than 70% to be eligible for the help to buy scheme.

So my question is: can I get a 70% mortgage and let’s say in 6 months time pay a lump sum into the mortgage and bring the LTV down to 50%? I realise I’ll need to be on a variable interest rate.

And to follow on, is it worth availing of the help to buy scheme or am I better suited to just have a LTV of 50% and take the lower interest rate?

Sorry but I’m learning as I go along here;)

Many thanks.

This may be better in the banking fourm than taxation.
Few basis things that comes to mind from your post.

Whether to go with 50% LTV and no HTB or 70% with HTB depends on two items. One can you pay the lump sum off 6 months down the line. Check the rules of the mortgage you are looking at in relation to lump sum payments, also check the HTB rules to ensure they do not have anything that would stop you making a lump sum payment.

If you pay the extra interest on the mortgage in the short term is it worth getting the money back on the HTB.

A point on HTB to ensure is also that it works out as 70% LTV. When Revenue look at if you are entitled to the HTB they round down when look at the percentage. For example if the mortgage is 70% in the banks eye but works out at 69.9% due the bank liking round number the HTB could be refused.

CantThinkOfANam wrote: »

So I wonder what’s Revenues take on me making the LTV 50% in like 2 months after everything is complete?

Arguably the LTV could drop to 50% if there was a sudden massive spike in houses prices in your area. Yes, it's not very likely, but it's effectively out of your control so I don't see how revenue could expect you to reimburse them.

As far as I know you can't dispose of the asset or rent it out in the first 5 years. That's the only claw back they have.