Help to Buy Scheme but LTV under 70%

K

kokiyou

Registered User
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6
Hi there,

Here's my story and request for advice.

I recently found a new development, with an ideal home for me, new build house for 420k ready in Winter (Nov-Dec).

I went to bank (UB) and all looks good for AIP. However this was with a 3.5 salary LTI and 50-60% LTV on the loan, I have a very healthy savings and clean record of high savings rate etc.

Now after applying for HTB scheme I realise that the LTV must be 70% or higher. This is outside of my single person application of 3.5 salary range as right now due to CV no exceptions will be made, they expect this to ease up in a few months time.

I was wondering as I quite like the house is it possible to put down the booking fee with the current AIP but have this AIP amended/updated with looser than 3.5 salary range upon signing for the property (in about 6 weeks time per Auctioneer)?


I and (UB) expect lending restrictions to ease and become greater than 3.5 LTI in the upcoming months but the house I want will more than likely be gone by then as the demand seems high even now.

If this is not possible I assume the only other method would be to get a parent to perform a joint income assessment on the mortgage? Scratch that, from reading HTB page any other folks on the mortgage must also be FTB-ers.

I assume that as HTB is checked upon signing (it would then be rejected right?), I cannot change the mortgage terms between 6 weeks time and the completion date in Winter 2020? If the mortgage terms can be changed between 6 weeks time and Winter 2020 to LTV of 70%+ could I then retroactively claim HTB?


In simpler words is it possible to:

  1. Get AIP and begin buying house with 60% LTV, sign for everything including HTB details (get HTB rejected by LTV number)
  2. Months later get different mortgage terms from bank at a higher LTV (I know this is not a guarantee)
  3. Then Retroactively Claim HTB as your LTV value now qualifies
 
Why not try another bank? BoI for example, get 2% cashback for your trouble? How far away from 84k are you? As in would you qualify for an exemption in the normal course?
 
Itchy said:
As in would you qualify for an exemption in the normal course?
Click to expand...

Given the timing here I'm not sure any of them will be giving exemptions soon enough.

OP, there's nothing stopping you approaching multiple lenders, but as above, it's hard to tell when any of them will allow exemptions.


Not a chance. Refinancing a mortgage is a very different thing to purchasing a home, the submissions made to revenue would easily highlight this as fraud.

The HTB scheme was designed to assist those finding it difficult to pull together the deposit. So it was deliberately designed to rule prudent savers like you out, which I'm sure seems quite harsh from your point of view.
 
I just saw the other thread that RSUs are possible to be taken into account for the LTI of 3.5? Or is that considered a data point for exemption?

If the former would you know which banks offer this?



Regarding fraud/refinance I probably mis-spoke I rather meant: can't I update the terms of the mortgage as it is only Approval in Principle, won't a salary change to adjust the LTI's final calculated value, or otherwise an LTI exemption be possible at a later date (between the signing stage and drawdown)?

The signing would be in ~6 weeks while the completion date would be Nov/Dec
 
Last edited:
kokiyou said:
I just saw the other thread that RSUs are possible to be taken into account for the LTI of 3.5? Or is that considered a data point for exemption?
Click to expand...

In my case it was within the 3.5 LTI, I wasn't looking for an exemption.

kokiyou said:
can't I update the terms of the mortgage as it is only Approval in Principle, won't a salary change to adjust the LTI's final calculated value, or otherwise an LTI exemption be possible at a later date (between the signing stage and drawdown)?
Click to expand...

If you're only closing the purchase towards the end of the year, you do indeed have time to adjust the mortgage terms, and even apply to other lenders. The bank will fully reassess your limits based on the full proposal and your circumstances at the time. However, if you enter into a contract to complete the purchase now, you need to be comfortable you will be in a position to draw down when the time comes to close or you may lose your deposit. So don't rely on getting an exemption at that stage and getting HTB approval to make ends meet.

It's difficult to predict when banks might start allowing exemptions again, the sooner that is the greater the chance they will have hit their limits before your closing date.
 
Right that makes sense.

I guess at worst I can:

1. Book place (if allowed without solicitor)
2. In 6 weeks time get the 5k booking fee back if I do not have the exemption by then
b) If no exemption, keep emailing mortgage correspondents for news/changes.

At best, I can try other lenders to try to get my annual bonus and RSUs and optional weekend work included in the 3.5 multiplier for LTI, hopefully that will remove the above plan and probably the unnecessary stress / waiting.
 
Might it be possible to lodge some of your savings with the mortgage bank with an agreement that the savings be paid off against the mortgage once the HTB has been drawn down?

That way you would have a LTI exemption to get you above 70% LTV but at no higher risk to the bank.
 
Thanks Mrs Vimes that is a good idea, once my bank / mortgage advisor is free I will try to discuss it.

I also was told by auctioneer/developer that total PC sum can be deducted from the mortgage draw down (i.e. can be paid in cash to developer), which is about 7% off the total value. So hopefully the math will work out
 
Hi there OP,

I have the same Q as you and I said I would bump this older thread and see how you got on as regards this situation after? Or if anyone else had a similar situation?

I have about a 68.5% LTV on the loan with the 3.5 times salary in place. So I currently just fall short of the 70% LTV requirement

Thanks!
 
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