Remortgage To Repay Help To Buy

Do you need a solicitor to remortgage with Help to Buy?

Yes, you do. Your solicitor will deal with all the money as you move from one lender to the next. The new lender will send the solicitor the money to pay off the old mortgage. That’s the normal remortgage process.

The solicitor also transfers over the deeds and does all the paperwork in the background. A basic remortgage doesn’t cost much at all and can often be free. Most lenders will give you a free legal service or enough cash back to cover your own solicitor – or ours if we’re helping you. Either way, it doesn’t cost you anything.

With Help to Buy repayment, we need that same solicitor to handle the money from the new lender, pay off the old lender and pay off Help to Buy. They’ll swap the deeds over and make sure everyone knows what’s going on.

So yes, we do need a solicitor and they’ll charge probably £200 to £300 to do that additional Help to Buy work – the remortgage bit will pretty much be free.

Is remortgaging the best way to pay back Help to Buy? Are there other options?

You could just do it with cold, hard money. You might win the lottery or receive a gift from your family – if you’ve got a lump sum of money you can do it that way.

You could potentially stick with your existing lender and do what we call a Further Advance, where you just borrow more money from the same lender.

You might decide to sell the property to pay off Help to Buy, but if you move and buy another property, Help to Buy isn’t portable – you can’t take it to the new house. It has to be paid off to enable you to move. But remortgaging is the way that most people do it.

How much does it cost to pay back Help to Buy?

It doesn’t actually necessarily cost much. There are no penalties or things like that. They do have a small admin fee, but that’s less than £100.

We just mentioned the solicitor, which is another couple of hundred pounds. We also need a valuation and they’re going to charge a little bit too. It depends where you are in the country and who you use, but I would expect it to be £200 or £300.

So it’s not without its costs, but there’s no penalty if you pay it off early. It’s not like a mortgage where you have an early repayment charge. You can pay it off whenever you like.

The costs I’ve mentioned are upfront costs. We can add a little bit more borrowing onto the mortgage to reimburse you, but you can’t add them to the mortgage like you would do with an arrangement fee, for example. You will need that money available at the start.

How can a mortgage broker help?

This is quite a complicated process. There’s a few moving parts and it’s important to get the timing right. You could do it yourself if you wanted to – and if you do, here’s a tip: the valuation from your Help to Buy surveyor and the one for your new mortgage application don’t need to match.

That’s the number one hint for anyone repaying Help to Buy. Speak to your surveyor and let them know what you’re doing and ask them to value your property as low as they can. No one’s going to lie. We’re not encouraging any sort of fraudulent activity here. But when you get your Help to Buy valuation, your surveyor will use ‘comparables’ – similar properties that have sold within the last six months, ideally within half a mile.

The chances of them finding a recently sold property that meets all those requirements is quite slim, so they have to use similar properties – maybe the same amount of bedrooms but a different layout. We just need them to use the smaller example to give us a feasibly low figure.

With the mortgage lender, it’ll be a different surveyor and a different day. We can ask them to give a slightly higher figure. They will never be hundreds of thousands of pounds different, but if it’s £10,000 different that will help. It means you pay back £2,000 less on your Help to Buy Loan and helps your Loan to Value – the percentage of the property’s value that is mortgaged.

The higher the value of your property, the better your loan to value and the better rates you could get. So it’s a complex process. There’s different timings, different people to speak to and different forms to fill in. You’re much better off getting some professional help to do it. With this one particularly, get expert help on the process.

Think carefully before securing other debts against your home. 

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up with your mortgage repayments.