A COUPLE from Birmingham nearly missed out on their dream home after being hit with an unexpected £4,000 bill days before they were due to complete the sale.
Alex Moulton, 32, and her partner Matt Priest, 29, had been relying on the 25 per cent Government-paid bonus from their Help To Buy Isa to help with the deposit.
SWNS:South West News Service Alex and Matt bought their four-bed home in Birmingham in June last year
But at the eleventh hour, they were told that their £280,000 house was over the £250,000 Help To Buy limit so they weren’t entitled to the free cash – something their mortgage adviser hadn’t picked up on.
This drove their deposit up from £12,000 to £16,000 and left Alex, an art teacher, and sales engineer Matt desperately searching for a way to find the extra money.
In the end, Alex’s dad was able to lend them them some but it meant that they had no leftover cash for furniture for their new home.
They ended up sticking £2,000 on credit cards in order to kit out the house.
SWNS:South West News Service Despite opening Help to Buy Isas they weren’t entitled to the Government top up
It took the couple three years to save the £12,000 by putting away the maximum £200 each into their Help To Buy Isas.
They also decided to move in with Matt’s mum to save on rent – although it meant there were four adults and Alex’s two pet cats all piled into a three bed house.
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Almost a year after getting the keys, Alex sat down with The Sun to warn others about the Help To Buy loopholes for our My First Home series.
What is your house like and what did you pay for it?
My fiance and I bought a four-bed, semi-detached house in a new development in Smethwick, Birmingham, last June.
It’s quite a special house. It overlooks a canal with a view of Birmingham city centre, and you can see the BP Tower in the distance – which is a Birmingham landmark.
SWNS:South West News Service The couple paid £280,000 for their home – but it’s £30,000 over the Help To Buy limit
SWNS:South West News Service Alex and Matt had wanted to buy a period property before settling on a new build
SWNS:South West News Service The couple were left £4,000 short when they were told they couldn’t claim the Government top up
Inside we have a kitchen and diner, a living room and three bathrooms. It’s a bit mad actually, we have more toilets than people living here.
Outside there’s loads of parking space, a massive garden and a garage.
We’d love to have the garden landscaped one day – I’ve got big plans for it.
SWNS:South West News Service At first, the couple had no money left to furnish the house
SWNS:South West News Service In the end, Alex’s dad helped them with the shortfall
We paid £280,000 for our house, with a 40 per cent – £112,000 – Help To Buy equity loan. We took out a mortgage for the remaining £152,000.
Originally we wanted a period property, but everything we saw was at the top end of our budget and needed a lot of work.
Sometimes I can’t believe how much house we got for our money.
Even now we’re still pinching ourselves, thinking we could never have afforded a house this big if we hadn’t gone for a new build.How much did you save and how did you do it?
My partner, Matt, and I each saved £6,000 – £12,000 total – over the course of three years.
We got together four years ago and started saving a year later, when we realised we were getting serious.
We both opened Help To Buy Isas and would put £200 a month in it. We did that for nearly two years, and then decided to move out of our rental properties to save even more cash.
SWNS:South West News Service The couple had been saving into their Help To Buy Isas for three years
SWNS:South West News Service The town house has views of Birmingham city centre
SWNS:South West News Service The couple have bought a dog since moving into their new home
We moved in with Matt’s mum, so we could put all our rent money into a savings account – on top of the £200 we were each putting into the Isa.
I’d been paying £550 a month in rent before that, so it freed up a lot of cash.
Our plan was to live with Matt’s mum for a year, so we had enough for a decent deposit, but we only needed to stay 10 months in the end.Was the Help to Buy Isa worth it?
As we had our money in the government’s Help To Buy Isa, we were expecting to get 25 per cent of our savings back – but found out at the very last minute our property was too expensive to qualify for the discount.
SWNS:South West News Service They’ve been living in their new home for almost a year now
SWNS:South West News Service The house is across three floors and has its own garden
SWNS:South West News Service Alex said that the house was “a big empty shell” when they first moved in
We paid £280,000 for our house – but the maximum cost outside of London is £250,000. It’s £450,000 for those in the capital.
Our mortgage adviser didn’t know about that – and nobody had told us – so we only found out when the solicitors on the property developer’s side said they couldn’t sell to us under the Help To Buy scheme.
This meant our deposit was going to cost £16,000 instead of £12,000 – so we had to scramble round at the very final stage to desperately try and find £4,000.
My partner wasn’t really in a position to find any money, and we’d both been saving to the absolute max so had nothing left.
SWNS:South West News Service Inside there’s a kitchen and diner, a living room and three bathrooms
SWNS:South West News Service The pair can’t believe how much house they got for their money
In the end, I had to ask my parents for the money. Thankfully my dad had moved around some of his pension funds to gift me and my two sisters, so they were able to help us out.What were your moving costs like?
Because we were hit with the unexpected £4,000 cost at the eleventh hour, we had nothing left when we actually moved in.
I’ve had to put an extra £2,000 on credit cards for furniture alone since moving in – but we just had to bite the bullet as it was literally a big, empty shell when we arrived.
SWNS:South West News Service The house has three bathrooms – more than there are people living there
SWNS:South West News Service They first opened their Help to Buy Isas a year after they’d moved in together
It’s a shame, as I thought I’d have a bit more money to furnish it – but luckily we both have big families, so we’ve managed to do a bit of beg, borrowing and stealing to make it a home.
My parents also bought us a sofa set from Sofology, which was a big expense and saved us a lot.
There are lots of things I still want to add. I’d like to do some re-tiling at some point, but I’m keeping a tight rein on things for now as it’s easy to get carried away.
How do your mortgage repayments compare to rent?
Our mortgage repayments on the house are £850 a month, which is quite a bit more than we were paying before.
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I’d previously lived in the same rental property for five years. It was a three-bed house and cost £550 a month. That was quite steep when it was just me, but a lot cheaper for the two of us.
We wanted quite high repayments on our mortgage, as you have to start paying interest on the loan after five years and we wanted to pay off as much as we could before that happens.
We got engaged in December 2017, so this does put the wedding back slightly.
What help is out there for first-time buyers?GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It’s a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan – The Government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25 per cent on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you’re restricted to specific ones.
“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.
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