How do I pay off a Help to Buy loan?

Marta Manuszewska
Marta Manuszewska
A woman looking into how she can pay off a Help to Buy loan

Part I - Repaying Without Selling

In this part, we will discuss the most popular method of repaying the Help to Buy loan – redemption without selling property. 

We are often contacted by clients, who bought a property using the Help to Buy scheme and would like to pay off the Help to Buy loan and own 100% of their property but don’t know where to start. We have prepared this short guide, where you can find some of the basic information.

Valuation for Help to Buy purposes must meet certain criteria, these are:

  • The surveyor must be independent of an estate agent.

  • The surveyor must provide at least 3 comparable properties and sale prices.

  • The comparable properties provided must be like for like and within 2 miles radius.

  • Valuations carried out for bank or mortgage purposes are not acceptable

Important

A help to buy valuation is only valid for 3 months. If the transaction does not complete within this time you will need to provide another valuation at your cost. This could be a desktop valuation which is cheaper and it needs to be provided within 2 weeks from the date of the original valuation expiring.

If you have got any additional questions regarding Help to Buy valuation or looking for an independent surveyor please contact Five Star Mortgages!

Once you have received your valuation you need to send it together with a short form to the relevant government agency that deals with the HTB repayment (currently this is Target HCA).
Once you have paid an admin fee to Target, (currently £200.00) and your valuation has been approved, a statement is prepared to tell you exactly how much you need to repay on the Help To Buy loan (known as a redemption statement).
As we have mentioned in our previous blog, the final sum will depend on your share of the equity loan and your current property value.

Going back to our example property, which is currently valued at £250,000,
if a 20% equity loan was taken from the Help to Buy, the total to pay back will be £50,000.

Important

You will need a solicitor, who on your behalf will conclude the repayment of the Help to Buy loan. The cost of the solicitor can be in the region of £1000.00.
If you would like to find out if we can help you to reduce the legal cost please contact us.
Where possible, we can help to find a lender that will offer the legal services free or at a lower cost. This can help you save a lot of money!
Our experienced advisors will also help you to fill in all necessary documents and will support you every step of the way!

For more information on how to repay a Help to Buy loan, please, contact Five Star Mortgages.

Get in touch today for a FREE consultation

Book an appointment through our form or call today on 0300 303 4676 to speak with one of our experienced financial advisors.

 
Marta Manuszewska

Marta Manuszewska

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Marta lunched Five Star Mortgage is 2016 having worked the previous 3 years providing mortgage advice along side a Law firm and the previous 7 years in residential lettings. This grounding in property has seen her grow a huge following in this area. Over the years Marta has seen her clients grow financially and need more and more complex advice. She set a goal and achieved this in 2019, that goal to qualify to provide Independent Financial Advice. At this point Marta became a Director / Owner of Positive Advisers Ltd and is now passionate in helping many of her mortgage and new clients with more complex financial planning advice. Marta lives in Oundle with Mark her partner and co-owner and son. Her favourite TV program is “Suits”. She enjoys theatre, concerts, dining out and spending time with family and friends.

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