02 Apr

How should I fund my help-to-buy home purchase?

I’m wondering if I should try to borrow more in a mortgage and get a smaller government loanQ I am currently in a process of securing a mortgage and help-to-buy equity loan on a new build with a purchase price of £420,000. My mortgage adviser has proposed that, to fund the purchase, I put down a cash deposit of £40,000 with a mortgage of £212,000 and apply for a help-to-buy equity loan of £168,000.When I enquired about securing a mortgage before I went down the help-to-buy route, I was told I could get a loan of up to £366,000. So I am a bit puzzled as to why my current mortgage adviser is suggesting that I go for a mortgage of only £212,000. With a bigger mortgage, I could go for a smaller equity loan which would be smaller and easier to pay off after the five-year interest-free period comes to an end. Or am I wrong in thinking that getting the maximum mortgage amount of, say £360,000 plus my £40,000 deposit would require an equity loan of only £20,000. I am very confused with this and would like to have the reassurance that my mortgage adviser is actually trying to secure me the best deal possible.JM Continue reading…

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