Are you going through a divorce or separation and want to remain in your Help to Buy home? It is important to fully understand your options. Here we look at different ways in which you can move forward, including removing a partner from a Help to Buy property, remortgaging a Help to Buy property and raising funds to pay off a partner.
Removing a partner from a Help to Buy Equity Loan and Mortgage
Your mortgage lender and Help to Buy loan provider will need to carry out an affordability assessment based just on your own income and outgoings. This is to make sure that you can afford to take on the property, mortgage and Help to Buy loan by yourself. If you pass this assessment, then Help to Buy and your mortgage provider will most likely give you permission to remove your partner. This is a legal process called Transfer of Equity. You may be charged an administration fee by Help to Buy and you will also incur legal costs. Your partner will need to be in agreement with this, as they will no longer have any legal right and ownership of the property
Can I remortgage my Help to Buy property to pay my partner off?
Yes you can. As long as you meet the affordability criteria of your new mortgage lender. Help to Buy will usually give you permission to advance your mortgage if you are using the funds to buy your partners full share of equity. This will be subject to your Help to Buy affordability assessment. They will calculate this based on the new mortgage amount.
Can I remortgage my Help to Buy property to repay my equity loan?
Yes, this can often be the best solution for you. This is also called stair casing. You take out a larger mortgage, repay the Help to Buy equity loan, and take over full ownership of the property with a transfer of equity to remove your partner form the property. One of the key benefits of doing this, is that you do not have to meet the Help to Buy affordability criteria. The affordability criteria set by mortgage lenders is often more relaxed and generous than Help to Buy. So, if you fail the Help to Buy calculations this gives you a solution. The other benefit of repaying the equity loan is that you do not need to worry about the loan increasing if the value of your property increases. The disadvantage is that the interest rate charged by your mortgage provider will most likely be higher than the low interest rates charged by Help to Buy.
If I sell my Help to Buy property can I port my mortgage to a new property?
If you decide to sell and both go your separate ways whilst you are still in your initial mortgage deal , then you may incur early repayment charges from your existing mortgage provider. Most modern mortgages are portable. This means that you may be able to sell your property, repay the Help to Buy loan and port your mortgage to a new property. The benefit of doing this is that you can benefit from your current mortgage deal and avoid the early repayment charges. Ask your mortgage adviser for advice about this.
Where do I start and how do I get advice?
It is important to get professional financial advice to find out which option will be most suitable to you. The best way to do this is to chat to a mortgage broker that understands this niche area of advice. To chat with an expert to find out exactly what is available to you start here :
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