Help to Buy Valuations
When the time comes to settle your Help to Buy equity loan, having an accurate valuation of your home is key. To meet the requirements of Target HCA, the administrators of the equity loan scheme, your property must be valued by an RICS qualified surveyor. At Survey Hut, we ensure that our team of experienced valuers are well-versed in the Help to Buy process, offering dedicated services in Greater Manchester, Cheshire, and Lancashire.
Navigating the steps to repay a Help to Buy loan can seem daunting, particularly when it involves interest payments on the government’s stake after the initial five-year interest-free period. Understanding that the loan repayment amount will reflect your property’s current market value rather than the original government contribution is important. It’s essential to choose a proficient surveyor who can provide a valuation report that fits the bill for Target HCA, saving you time and potential complications during the repayment or sale of your property.
If you’re considering remortgaging, selling your home, or using your savings to pay off the loan, you’ll find that engaging with an RICS-registered surveyor early on can streamline the process. Our friendly team at Survey Hut is ready to answer any queries you have and can offer you tailor-made advice for your valuation needs. Rest assured, we’re here to support you every step of the way, from initial valuation to the successful completion of the Help to Buy equity loan repayment.
Understanding Help to Buy Valuations
When you’re ready to repay your Help to Buy equity loan, a valuation of your home is crucial. The valuation determines how much you repay based on your home’s current market value. Let’s explore what this entails.
A Help to Buy valuation is an appraisal of your home’s value conducted by an RICS qualified surveyor. Its purpose is to assess the current market value of your property, which is essential in calculating the amount owed on your equity loan. The equity loan repayment reflects the property’s value at the time of repayment rather than its original purchase price, meaning if your home’s value has increased, so has your repayment amount.
- Steps for a Valid Valuation:
- Instruct a surveyor who is both RICS qualified and a registered valuer.
- Ensure the valuation meets Target HCA’s requirements.
- Use the valuation report, valid for three months, to initiate repayment.
Following RICS guidelines for your Help to Buy Valuation is not just important; it’s a requirement. RICS, or the Royal Institution of Chartered Surveyors, sets the standard for property valuations to ensure fairness and accuracy. RICS surveyors uphold these professional guidelines to provide valuations that lending institutions, such as the government’s loan administrator Target HCA, can trust.
Why RICS Guidelines Matter:
- They ensure a consistent and reliable valuation process.
- Valuations are recognised and accepted by mortgage lenders and government bodies.
- Using an RICS surveyor mitigates legal and financial risks during the loan repayment process.
Remember, the market value ascertained by the RICS valuation will determine how much you repay on your equity loan when you sell your property or choose to pay off the loan. Choosing the right surveyor – one who is RICS qualified – is a key step in this process. At Survey Hut, we offer these services across multiple locations, providing the professional guidance you need to navigate your Help to Buy valuation with confidence.
The Valuation Process Explained
When you’re ready to settle your Help to Buy equity loan, understanding the valuation process is crucial. It’s important to know how the value of your property will be assessed by a qualified surveyor and how this figure affects your repayment.
Engage a surveyor who is RICS qualified and registered (Survey Hut). Only professionals like us can provide a valuation report that meets the specific needs of the Target HCA and the Help to Buy scheme.
Your surveyor will schedule a visit to perform a detailed inspection of your property. They’ll assess its condition, size, features, and improvements you may have made.
We will examine similar properties in your area to determine the current market value. This ensures your home is valued fairly against recent sales.
After thorough analysis, we compile a detailed report, which includes the inspection findings and comparisons to recently sold homes.
Your report will be valid for three months. If the sale or remortgaging exceeds this period, an extension can be granted with an updated desktop valuation report.
Interpreting the Valuation Report
The report determines the current market value of your home, which is key in calculating how much you need to repay to settle the Help to Buy equity loan.
It will contain a breakdown of how the valuation was reached and provide you with the necessary figures to proceed with your conveyancing solicitor.
Submit the valuation report alongside your application form to the Target HCA for processing the repayment of your equity loan.
With this report, you’ll understand the percentage of the equity loan to be repaid, based on the current value of your property, not its value at the time of purchase.
Once interpreted, work with your conveyancing solicitor to ensure all legal formalities are completed effectively, paving the way towards settling your equity loan.
Repaying the Help to Buy Equity Loan
To settle your Help to Buy equity loan, an RICS qualified valuer must ascertain your home’s current market value. If your property has appreciated, you will repay more than the original loan amount, as the repayable amount is the corresponding percentage of your home’s current value, not the initial equity loan value. Here’s what you need to know:
Valuations are valid for three months, with a possible four-month extension.
A legal expert will guide you through the repayment process.
A fee of £200 is payable for the administration of your loan repayment.
Ensure to submit the valuation report, application form, administration fee, and memorandum of sale to proceed.
Implications for Remortgaging and Selling
When you’re ready to remortgage or sell your home, consider how the Help to Buy equity loan impacts these transactions. The steps are:
- You can use remortgaging to raise funds for repaying your Help to Buy loan.
- Be mindful that lenders will account for the equity loan when calculating how much they’re willing to lend.
- On selling your property, the equity loan must be repaid from the sale proceeds.
- This repayment is a percentage of the sale price equivalent to the initial equity stake.
Frequently Asked Questions
After five years, interest is payable on the government’s Help to Buy equity stake, in addition to your normal mortgage payment.
The equity stake you pay back is based on the value of the property at the time of the repayment, not what the government initially put in. This means that if the property increases in value, you will not receive all of the worth – the government shares it with you.
The administrator of the government’s equity stake is Target HCA.
They can be emailed at [email protected]
Or, written to at: Target HCA, PO Box 911, Newport, NP20 9PA
There are three ways to pay off the Help to Buy equity loan:
- Using your own money
- When remortgaging the property
- When selling your home
You should start the process when you receive an offer for your property, or are close to confirming the sale.
Instruct a surveyor who is both RICS qualified and a registered valuer to value your property.
The valuation report should be compliant with Target HCA’s requirements – an experienced surveyor will know what is required.
The valuation will last for three months to allow the process to conclude. If it takes over three months, the surveying firm can extend it by up to 4 months by issuing a letter and undertaking a desktop valuation report.
You will need a conveyancing solicitor to help you with the process.
To find a solicitor, look at the Law Society website.
An administration fee of £200 is payable to Target HCA.
An application form will need to be completed.
You can find the application form here.
You will need to send the administrator the:
- RICS valuation report
- Completed application form
- Administration fee
- Copy of the memorandum of sale from the estate agent, if you are selling your home.
Once the above are received by the administrator, a redemption letter will be issued, confirming the percentage of equity loan you took out and how much the repayments will be.
There are a number of legal actions your solicitor and the administrator will need to perform to complete the process.
These include a Legal Undertaking Agreement being drafted by your solicitor, an Authority to Complete form being issued by the administrator to allow the sale or repayment process to complete, and payment of the outstanding funds. If you fully repay the equity loan, the administrator will apply to the Land Registry to remove the charge on your property.
