Help to Buy  

How brokers can help clients with Help to Buy loans

This article is part of
Guide to Help to Buy

Wave of interest

However, Ray Boulger, senior mortgage technical manager at John Charcol, predicts there may not be the deluge of enquiries that some advisers are expecting.

He explains: “Although the Help to Buy equity loan scheme was launched in April 2013, the chancellor gave so little notice of the launch that there were very few completions until the third quarter of 2013.

“Hence it is too early to expect many enquiries specifically about the start of interest being charged on the Help to Buy equity mortgage.”

But visiting the goverment-backed website seems to suggest otherwise.

A message on its homepage on the 27 April states: “We are currently experiencing extremely high call volumes.”

Due to the timing, it is more than likely that these are queries from Help to Buy borrowers about what to do next.

Craig Hall, new build manager at Legal & General Mortgage Club, suggests: "Many brokers are already receiving enquiries from borrowers that are reaching the end of their product term and are looking at options to repay their equity loan. This is only set to increase as the scheme continues to grow."

So, what can brokers do now to be of the most assistance?

Mr McCoy says: “At TMA, our advice for these advisers is to speak with Help to Buy borrowers to assess their future plans and how they have changed, if at all, when they first took out the Help to Buy product. 

“For some, a remortgage may be possible, while for others they may decide to look at other options available to them to manage their mortgage and other financial commitments.”

Mr Hall adds: "Brokers have a great opportunity here to reconnect with their clients to assess if their needs and circumstances have changed, and whether there are other options which would suit them better."

Ms Judge acknowledges it is difficult for government and the adviser industry to know how much customers remember about the equity loan from when they took it out five years earlier.

Should they assume borrowers have the knowledge to understand the choices that lay before them?

“It’s really hard to know how savvy people are about them [Help to Buy equity loans] and it is also hard to know if they remember five years after they’ve signed the document what they’re going to have to pay,” she notes.