What is it and how does it work?
There are two 'Help to Buy' schemes that have been introduced.
Help to Buy Equity Loans
With a Help to Buy equity loan, the government loans you up to 20% of the cost of a new-build home, so you only need a 5% deposit and a 75% mortgage to make up the rest.
Help to Buy equity loans are open to both first-time buyers and home movers. This scheme is only available on new-build homes worth up to £600,000.
You won't be charged loan fees on the 20% loan for the first 5 years of owning your home. In the 6th year, you'll be charged a fee of 1.75% of the loan's value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%
When you sell, you must repay the equity loan from the sale proceeds.
Help to Buy Mortgage Guarantee
This Help to Buy scheme helps people buy a newly built home or an existing property with a deposit of only 5% of the purchase price.
The aim of this scheme is to encourage lenders to offer more mortgages to borrowers with small deposits. The guarantee is provided to your lender – not to you, and you'll need to pass the usual lender affordability checks.
The scheme is open to existing homeowners, as well as first time buyers, on new build and existing properties up to £600,000.
You will still be fully responsible for your mortgage repayments.
The schemes are not available for those wishing to purchase a second home or buy-to-let.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.
Want to know more about these schemes?
Call 01924 468914 now for more information.