Important information about equity loans

Important information for people who purchased a home from Moat with an equity loan

Your equity loan with Moat 

Moat’s leaflet – Repaying your equity loan – outlines the process you will need to follow when you move home or purchase the remaining equity to own your home outright.

If you wish to repay your equity loan, please complete this application form and return it to us as soon as possible.

This applies to all open market HomeBuy schemes including:

Open market HomeBuy
Key worker open market HomeBuy
Expanded open market HomeBuy
Open Market HomeBuy Government loan only (GLO)
Starter Home Initiative (equity loan option)
MyChoiceHomeBuy 

This information does not apply if you purchased a property through a shared ownership scheme. Neither does it apply if you purchased a property through the First Time Buyers’ Initiative, HomeBuy Direct, FirstBuy or Ownhome.

Moat sent letters to all equity loan holders on 3 October 2011 clarifying changes to the terms and conditions relating to portability of equity loans.

If you need additional financial help, we regret that there is no provision for equity loans to be increased.

Moat’s panel of experienced independent mortgage advisors (IMAs) are happy to talk to you regarding your mortgage and other financial services, to assist with repaying your equity loan. Contact details of the IMAs on our panel can be found on our website.

Moving home

If you are considering moving to a new home, it is important to remember that you will usually need to repay your equity loan in full at the time of the sale. You will need to factor this into your calculations of how you will finance your purchase of a new property.

You should also check with your mortgage lender about cost implications and whether you are likely to incur early redemption or early repayment fees that may apply as a condition of your mortgage. 

Portability

Portability – or porting your loan – is the principle of transferring your equity loan from the property you originally purchased to a new property. This eventuality may arise if you sell your property and move home. Moat receives a substantial number of enquiries from people who would like to port their equity loans, but this is not usually possible.

In the past, Moat has provided equity loans under a number of different schemes. Under some schemes, the option to port an equity loan was never available, and this remains the case. Where porting of equity loans was permissible (for key workers and certain schemes only), this was still subject to the approval of Moat and was based on guidelines issued by the Homes and Communities Agency (HCA). The right to port a loan was never an automatic entitlement.

Under rules introduced by the HCA, porting of an equity loan is now only possible if you are in a position to claim ‘exceptional’ circumstances. Examples of such circumstances would include people who are fleeing from violence or suffering harassment. The interpretation of this condition is stringent and consequently we anticipate that successful applications for portability will be unusual. You will also need to be a qualifying key worker who purchased under a scheme where portability was permitted.

If you are in a position to claim exceptional circumstances and you need to port your loan to another property, please contact us and we will do our best to assist you. We will ask you to write to us and provide evidence of your exceptional circumstances, supported by formal records. Relocation as a result of a change of employment, or a relationship breakdown, are not considered to be ‘exceptional‘ for the purposes of this scheme.

Your application will be considered against additional criteria, such as affordability and other eligibility conditions. If the value of your home has reduced and you are in negative equity, it is unlikely that we can consider your application to port your loan, regardless of your circumstances, however exceptional. An administration fee of £1,250 + VAT applies where portability applications are approved.

Sub-letting

Update March 2012: 

We are currently reviewing our sub-letting policy and the information contained within this webpage is subject to change. We will update this webpage shortly with more information.

Important information for people with a Moat equity loan charge on their property  

We are unable to consider requests for permission to sub-let your property at present. We are currently looking into whether this is legally possible and will update this information shortly. Please consider other options such as redeeming (paying off) your equity loan or selling the property. Sub-letting, at present, is not an option.

Information leaflets