In this brief guide, we will cover how to sell your help to buy property depending on the help to buy scheme you used to purchase your help to buy home.
If you want to sell your help to buy shared ownership home you must first inform your housing association or landlord who will instruct a valuation( which you will pay) to let you know how much your shares in the property will be worth.
Once this is done the housing association or landlord will write to you confirming this and the sales agreement.
If you are fine with everything, you can sign your sales agreement and send it back to your housing association or shared ownership landlord.
If the property price has risen since you first bought it you will benefit from the increase in value relative to the shares you own.
You will have to clear any debts outstanding such as rent or your service charge before the shared ownership sales process can begin.
During the sales process, you will continue to pay your monthly rent, service charge and any other fees.
You can’t just sell your property on the open market, the housing association or shared ownership landlord will have to approve any prospective buyer to ensure they are eligible for the help to buy scheme.
The help to buy shared ownership landlord or housing association will aim to sell your home to its waiting list of shared ownership resale prospects. This is known as the nomination period.
If the shared ownership housing association or landlord cannot find a buyer for your property they will let you know and let you know that you can now market your property as a shared ownership property on the open market.
Your shared ownership housing association or landlord will have the right of first refusal on your shared ownership property even after you have staircased to 100%.
Yous should also be conscious that you could have to deal with negative equity when selling your help to buy shared ownership home due to the fact that most new build properties are sold at around 10% -20% above their market value.
This means the mortgage you took out to purchase your shared ownership sales could be worth more than your shares in the property when it becomes time to sell your shared ownership home.
If you are selling on the open market you can either sell your share for the full value of the property but if you want to sel100% and don’t own all the shares you have the option to do ‘back-to-back’ or simultaneous staircasing where you purchase and immediately sell the remaining share of the property that you don’t yet own on the completion of the sale.
How to sell your help to buy equity loan home
When selling your help to buy equity loan you will have to inform the help to buy agency (national post sales agency) who will inform you of how much their stake is in your property.
They do this by appointing an independent valuer who decided what the property is worth.
You will not be able to sell the property for anything less than this.
As a condition of the sale you must pay your help to buy equity loan in full once you sell your property.
If you sell your help to buy equity loan before 5 years this will mean you have paid no monthly interest repayments on the loan.
You should be conscious that negative equity could mean you owe more on your mortgage than your property is worth and this will mean you will have to fund the deficit from your savings or by borrowing.
If you intend to buy another home with the help to buy equity loan you will need to complete your current sale first.
Your mortgage lender may charge you an early repayment fee if you are currently on a fixed rate mortgage.
If you are buying a new home with the same mortgage lender they may waive the early repayment fee.
The alternatives to selling your help to buy equity home:
- pay off your initial equity loan with your savings or another loan
- Remortgage and use the equity in your home to pay off your initial help to buy equity loan
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.