The Help-to-Buy loan program is a five year old government program that provides financing to homebuyers who have adequate income to make loan payments but who don’t have enough money on hand for a mortgage deposit. Although many mortgage lenders consider these government loans to be debt and the payments made on them to be debt consolidation, Ipswich Building Society recently announced that it will no longer count repayments as debt consolidation, with the result that Help-to-Buy borrowers will be eligible to borrow up to 95 percent loan-to-value (LTV) while refinancing.
- Five years ago the UK developed the Help to Buy Loan, aimed specifically at assisting those who were struggling to raise their initial mortgage deposit.
- Unfortunately, the Help to Buy loan has been historically considered as more dept by those financiers with the ability to help people remortgage.
- When that has happened, remortgage options have often disappeared off the table, or been capped.
“The Ipswich Building Society has revealed that it will not count a borrower’s existing Help to Buy loan as debt consolidation when they are applying for a remortgage.”