Help to buy
Help To Buy – Do I Qualify?
The government Help To Buy Mortgage scheme is available to first-time buyers and existing homeowners hoping to upgrade to new larger properties.
To be eligible to qualify for a Help To Buy mortgage the client must:-
- Have a minimum deposit of 5% of the purchase price.
- Be looking to purchase a property up to the value of £600,000 maximum.
- The property must be for your own use.
- The property cannot be let out or used as a holiday or second home.
- Interest only mortgages are not allowed, mortgages must be arranged on a repayment basis.
Mortgage Guarantee Scheme
The Mortgage Guarantee Scheme has two parts.
The first time buyers who have a deposit of 5% to purchase a property would qualify for a mortgage of 95% of the property value.
Buyers with a 20% deposit to purchase a property would qualify for a mortgage of 80% of the property value.
The scheme will make loans less risky as the government will cover 15% of the loan for the benefit of the lender, this is in case of repossession or default etc.
By offering this guarantee it frees up lending to the buyer with a minimum deposit of 5%
This has made available more loans from lenders who wish to participate in the scheme.
Our adviser will help to identify which lenders offer loans on the Help To Buy Schemes and the Help To Buy Guarantee Schemes.
Equity Loan Scheme
This part of the scheme will offer an interest free loan of up to 20% of the value of the new property, the maximum property value of £600,000!
This allows the borrower with a deposit of just 5% to purchase a new build property and apply for a mortgage loan of 75% of the property value.
The scheme allows a deposit of between 5% to 20%.
The Help To Buy Equity Loans are interest free for the first five years, after this period a monthly administration charge starts which is 1.75% of the loan amount.
The charge will then increase every year by any increase in the Retail Price Index (RPI) plus 1%.
The Equity Share Loan has a maximum term of 25 years. The loan will need repaying when the term ends or when you sell your home whichever happens first.
You will repay the market value of the loan at the time, not the amount of cash that you were loaned.
If you wish to repay part of the loan early it will be in incremental amounts of either 10% or 20% of the total value.
If you would like to discuss it more detail, please contact us directly.
Please contact us for further information or for us to provide you with an illustration.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.