21 Feb 2014 22:12:29
Long time reader, usually post on the football pages. Was just wondering if any one had any info on the governments new help to buy scheme? As in is it a good thing and what would be positives and negatives of it. Be grateful for input. Thanks

 
Personally I think there is going to be another crash and I would be very wary, don't forget the debt that we owe is still there, even with all the cut backs we are only paying the interest back, now if you have a very secure job and you are say a MP or a funeral director then go for it, seriously I have my doubts.

{Ed033's Note - it looks like it's possible to purchase a house with a 5% deposit rather than the usual 10% or higher but as you would then have to pay back 95% at interest, the total amount to pay back is more. If your heart is set on owning a house, then this could help people who can't get a mortgage because they can't find the initial 10% or more.

 
Sorry but I got to flag this, Franky. MP or Funeral Director! hilarious buddy.

 
Help to buy schemes are a disaster waiting to happen, especially if you are going to buy a new build. As new builds are sold over value, you will immediately be in negative equity. With interest rates increasing within the next 2 years, lenders will more then likely refuse to offer a new product when your existing deals ends, this is currently happening with shared equity schemes. The result is leaving you on svr which can raise at any time. If interest rates do increase by 1% you will be paying at least 6% if not more. Once this happens you will find more people default on their mortgage resulting a house price crash leaving those who are on a help to buy in even bigger negative equity. My advance as a cemap qualified mortgage adviser is to wait and save a bigger deposit. It gives you a bit more breathing space if things go belly up.

 
Good advice red.