Sample Help To Buy Authority To Proceed Letter

Form of Authority to Proceed
Date: 08 January 20X9

Expiry Date: 08 April 20X9
To:
To:
CC:
Scheme: Help to Buy
Property:
Named Buyer:
Option A
Your application to take part in the Help to Buy Initiative has been approved by Help to Buy London and (subject
to our standard terms) an equity loan will be available in respect of the Property referred to above on the
following terms:-
FULL DETAILS OF NAMED BUYER:
REDUCED PURCHASE PRICE (i.e. the amount met by the Buyer after deducting the amount advanced under
the Equity Mortgage from the Full Purchase Price and excluding any mortgage fees of the Qualifying Lender):
£ 292800
FULL PURCHASE PRICE: £ 488000
CONTRIBUTION (The Agency contribution (to be paid directly to the Provider), specifying in pounds sterling the
amount of purchase price to be treated as deducted): £ 195200
CONTRIBUTION PERCENTAGE (specifying percentage of the total sale proceeds to be repaid to the Agency
when the property is sold, calculated as the Contribution as a percentage of the Full Purchase Price): 40%
MORTGAGE LEVEL £ 266050
APPROVED 1st CHARGE MORTGAGE TERM 30 YEARS
FORECAST INTEREST CHARGE YEAR 6 £284.67
(This will be collected by the Post Sales Agent in year 6)
REQUISITE AMOUNT OF CASH SAVINGS TO BE INVESTED BY BUYER: £ 26750
(which will exclude any cashback incentive provided to the Buyer and must be equal to a minimum of 5% of the
Full Purchase Price).
CASHBACK PROVIDED BY PROVIDER (to be paid to the Buyer on completion
TOTAL AMOUNT OF INCENTIVES PROVIDED BY THE PROVIDER (as set out in the Council of Mortgage
Lenders Disclosure of Incentives Form) and not to exceed 5% of the full purchase price. Developer to pay
stamp duty
BUYER'S PROPERTY TO BE SOLD PRIOR TO PURCHASE:
Guidance for the Buyer
You should have read the Help to Buy Buyer's Guide issued to you when you reserved your
Property. (If required, a further copy of the guide is available on our website –
http://www.helptobuylondon.co.uk). You should ensure that you have read this Guide before
continuing with your purchase.
The Help to Buy process will require you to meet certain reasonable time deadlines. It is very
important you make every effort to adhere to these otherwise your home may have to be reallocated
to another buyer. You may find the enclosed checklist a useful aid in progressing your transaction.
If you wish to proceed with your Help to Buy home purchase on the above terms you must now:-
Step 1
You should by now have seen an independent financial advisor (IFA) and be getting ready to submit a mortgage
application. It is very important that you seek independent advice about your mortgage. The mortgage must be
from a qualifying lender.
Qualifying lending institutions include mortgage lenders who are authorised under the Financial Services and
Markets Act 2000, and who have permission to enter into regulated mortgage contracts.
This is likely to include most banks and building societies. The Financial Conduct Authority keeps a register of
authorised persons on its website. The register can be found at http://www.fsa.gov.uk/register/home.do.
'Qualifying lending institution' is a complex definition. If there is any doubt as to whether a lender falls within this
definition, Help to Buy Agents should ask prospective Help to Buy buyers to seek confirmation from their
proposed lender of permissions they have been granted by the FSA.
The mortgage offer you should receive must be equal Mortgage Level noted on the front of this form and should
be for a repayment mortgage. Interest only mortgages will not be approved for Help to Buy assisted purchases.
If this is not the case you should discuss this with the Help to Buy Agent.
In addition to your mortgage funding, you have also told us that you will be making a cash contribution at
exchange of contracts as referred to above.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt
secured on it.
Check that this mortgage will meet your needs if you want to move or sell your home or want your
family to inherit it. If you are in any doubt, seek independent advice.
Step 2
Help to Buy London has reviewed the Property Information Form completed by you and the house builder and
has prepared this Authority to Proceed based on the information you have provided. This Authority to Proceed is
valid for three months and you must exchange contracts to purchase the home in this time.
Although this Authority to Proceed is valid for three months, you will be expected to exchange contracts
within a period of time specified by the Provider. The three month limit gives some allowances for
unforeseen delays during conveyancing.
UPON RECEIPT OF THIS AUTHORITY TO PROCEED, YOU MUST AS SOON AS POSSIBLE CONTACT
YOUR IFA AND LENDER SO THAT A FULL MORTGAGE OFFER CAN BE MADE ON YOUR SELECTED
PROPERTY.
Step 3
Your solicitor/conveyancer will advise you on the Help to Buy Initiative and prepare all the documents. Your
solicitor/conveyancer will explain the Equity Mortgage which means that the Agency must be paid the amount
due under its mortgage when the property is sold or earlier in specified circumstances.
SO, FOR EXAMPLE, IF THE HOMES AND COMMUNITIES AGENCY INITIALLY PROVIDED A 20%
CONTRIBUTION, THE REPAYMENT WILL BE 20% OF THE TOTAL VALUE WHEN IT IS SOLD OR WHEN
REPAID IF EARLIER.
You must sign to agree the Equity Mortgage and the sale contract before exchange of contracts. Your solicitor
will contact you to arrange this.
Once your mortgage offer and valuation has been received, your solicitor/conveyancer will ask Help to Buy
London for permission to exchange contracts with the Provider. After exchange you will be legally committed to
purchasing the property.
You will also be advised of the date for completion so that you can plan your move. It is also important that you
arrange buildings insurance cover for your new home from exchange of contracts.
If you have an existing home or property you must ensure that this is sold on or before the completion date of
your purchase of your Help to Buy property.
Step 4
Help to Buy London will approve the exchange and your solicitor/conveyancer will exchange contracts and
ensure your deposit contribution is paid. You will then be legally contracted to complete the purchase at a date
agreed between you and the Provider.
Step 5
At completion, your lender will provide its funds and the Agency will send its contribution to the Provider. You
will have already agreed and directed in the Property Information Form that the Agency's contribution is to be
paid direct to the Provider. You will then be able to move in on a date agreed with the Provider.
The Agency has nominated an agent to administer the Equity Mortgage following completion, currently Target
HCA (the Mortgage Administrator) and all correspondence and payments required under Equity Mortgage will be
to the Mortgage Administrator, until you are advised otherwise.
Your application will be treated as withdrawn if you do not proceed to exchange of contracts within
the deadline given. If you are unsure of how to proceed, please contact Help to Buy London at 6
Houghton Hall Business Park, Porz Avenue, Houghton Regis, Beds, LU5 5UZ – 0300 5000 996
Before you proceed, make sure you have read the Help to Buy Buyer's Guide that explains how the
Help to Buy Initiative operates. If you are unsure on how to proceed, please contact Help to Buy
London for help.
Remember, do not enter a legal agreement to buy a home until approval has been given by us.
[The Buyer's Solicitor should note however that unless we otherwise confirm in writing:-
(a) This Authority ceases to have effect if contracts are not exchanged for the sale of the Property
within three months of the date of this Authority; and
(b) This Authority is subject to receipt by the Buyer's Solicitor of a mortgage valuation valuing the
Property of no less than the Full Purchase Price.]
Yours sincerely
For and on behalf of Help to Buy London
Enclosures Personal Worked Example

Sample Help To Buy Authority To Proceed Letter

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Form of Authority to Proceed

Date: 08 January 20X9

Scheme: Help to Buy

FULL DETAILS OF NAMED BUYER:

FULL PURCHASE PRICE: £ 488000

APPROVED 1st CHARGE MORTGAGE TERM 30 YEARS

FORECAST INTEREST CHARGE YEAR 6 £284.67

(This will be collected by the Post Sales Agent in year 6)

REQUISITE AMOUNT OF CASH SAVINGS TO BE INVESTED BY BUYER: £ 26750

CASHBACK PROVIDED BY PROVIDER (to be paid to the Buyer on completion

BUYER'S PROPERTY TO BE SOLD PRIOR TO PURCHASE:

Guidance for the Buyer

For and on behalf of Help to Buy London

Enclosures Personal Worked Example

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