Help to Buy (Target)

Target has been appointed as a company by HCA to handle your redemption on their behalf.

Help to Buy (Target)

To assist you with your redemption on behalf of the Housing and Communities Agency (HCA), Target has been appointed as a company by HCA to handle your redemption on their behalf.

Your Redemption will be subject to a RICS Help to Buy Valuation carried out by a RICS Registered Valuation Surveyor as part of the Redemption process with Target HCA. For your Help to Buy loan to be repaid, Target requires the Help to Buy valuation to be performed to establish the Market Value of your property.

There are some strict criteria for a Help to Buy valuation, and Target HCA will reject a valuation report that is incorrect or incomplete.

As and when your funds become available, the Home and Communities Agency (HCA) will liaise directly with your Solicitor about redemption figures. As and when you receive your funds, your Solicitor will have the responsibility of overseeing a repayment process when these funds become available, whether by selling the property, remortgaging, or making a repayment. Depending on whether your original scheme involved a contribution from the builder, for example First Buy or Home Buy, the administrator will be in touch with them regarding the valuation of your property.

Based on our experience in helping to redeem Help to Buy valuations, the following are the details of the procedures we recommend based on our experience in helping to redeem Help to Buy valuations.

• You should not have a valuation completed on a property before you have agreed to an offer on the property if you are planning to sell it. By doing this, you will be able to get the most use out of the validity period of the valuation, which is three months.

• A valuation report is often requested at an early stage of the remortgage process by Financial Advisers and Lenders. We recommend that you follow the re-mortgage principles as far as possible before requesting a valuation for the redemption of your property or commissioning a valuation for the re-mortgage process.

How does a Help to Buy valuation work?

It is very similar to a mortgage valuation, where we visit your home and use our local market knowledge to put a value on your home based on the information we gather about your home. The research will be done to determine the values of similar properties and market conditions will be considered when doing so.

How long does it take?

In most cases, we can visit Help to Buy valuations within 3 working days and sometimes even sooner, depending on the location and availability of the agent. A copy of the inspection report will be sent to you within 72 hours of the inspection taking place, and the inspection itself will take less than 1 hour.

What is the validity period of the Valuation?

Please keep in mind that it is only valid for a period of three months. As a result, we will need to reconfirm the valuation after a certain period and if it has not been done within 6 months, we may need to perform a new report. In addition to that, the longer you leave it, the more likely your property is to appreciate, which will lead to a higher Help to Buy valuation.

What do we do with it?

Your estimated repayment quote will be sent to you once you have successfully submitted a valid Help to Buy valuation report. Your solicitor will use this information to calculate an accurate final repayment amount based on any arrears and interest rate.

It’s more than just a valuation.

At the end of the report, you will find a section called ‘Issues for your legal advisors’ that summarises all matters that need further investigation by your solicitor or conveyancer. When filling out the property questionnaire, the current owner has a duty, to be honest but statements that cannot be verified independently should not be relied upon.

There might be several potential legal questions that could be raised in a Homebuyer Report, such as any ambiguity regarding ownership of outside space and access rights, off-street parking, the physical boundaries, and documentation pertaining to extensions and alterations (both to the subject property as well as to neighbouring properties). Including guarantees and warranties, as well as proposed work to high-level roofs that could not be inspected.

A Help to Buy Valuation Report is a complicated document that we prepare on your behalf.

The following are included:

• The surveyor’s professional opinion of the property’s ‘market value’

• A list of all the features in the Condition Report

• The surveyor’s assessment of the property’s potential problems

• An insurance reinstatement figure for the property

• Recommendations for repairs and maintenance

• Investigations needed to prevent serious damage or dangerous conditions.

• Legal issues that need to be addressed before completing your purchase; and

• Information about the location, the local environment, and the recorded energy efficiency (where it is available)

There are several reasons why you might need a Help to Buy Valuation Report.

When paying back your equity loan, you have two options; Full Redemption and paying your equity loan back in full of or without selling your property, or Partial Redemption, also known as Staircasing, where you pay back part of your equity loan without selling your property.

If you would like to know more about the complete process and documentation required for either of these options, please refer to the Target HCA Customer Information Pack.

Redeem when you sell.

Upon selling the property against which your loan is secured, you will be required to repay your loan in full at that time. The process is also called loan redemption.

The repayment amount you will be required to pay is calculated as a proportion (percentage) of either the current market value or the agreed sale price of your home. Whichever is higher will be chosen, for example, if you have sold your property for £200,000 and the RICS valuation for redemption considers the value to be £210,000 then the HCA will accept the latter figure. If the RICS valuation for redemption is £190,000 then the HCA will consider the agreed sale price at £200,000.

Staircasing with another loan.

As a result of this scenario, you will be looking to repay part of your loan (redeem) by taking out another loan secured on your property from another lender to repay your current loan in part.

Staircasing without a loan.

As above, you will be looking to repay part of your loan (redeem) by taking out another loan secured on your property from another lender in order to repay your current loan in part.

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