Help To Buy Mortgage Advice
If you are looking to move with a limited deposit, the new government scheme ‘help to buy’ is here to help.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The ‘Help to Buy’ schemes help you buy a home without struggling to save for a huge deposit. These Mortgage schemes enable the purchase of a property with only a 5% deposit. This scheme does not guarantee your payments; you will still need to borrow responsibly and get suitable protection.
Help to Buy will help many more people with their first step on the property ladder and those wishing to make the next step, as mortgage lenders are now more likely to offer 95% mortgages backed by the government.
Help to Buy Equity Loan
- Equity loans are open to both first-time buyers and home movers on new-build homes in England.
- You won’t be able to sub-let your home if you use this scheme. It must also be your only property
- You will need to have agreed in principle a 75% LTV mortgage for the total purchase price with a lender
- You will need to provide a 5% cash deposit of the total purchase price
- The Government will lend you 20% of the total purchase price which can be paid back at any time or on the sale of the property
- In England & Wales, the Equity Loan is interest-free for 5 years
- 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%
- The maximum purchase price is £600,000
Help to Buy Mortgage Guarantee
- You will need to have agreed in principle a 95% LTV mortgage for the total purchase price
- You will need to provide 5% cash deposit of the total purchase price
- The Government guarantee 15% of the total purchase price provided to your lender – not to you
- The maximum purchase price is £600,000
- Must not be a second home nor can you rent out the property or have an interest in any other property
- You don’t have to be a first-time buyer and there’s no limit on your level of income. But you can’t use Help to Buy with any other publicly funded mortgage scheme, or an interest-only mortgage
Am I Eligible?
You need to pass lenders credit checks and affordability will need to be agreed and proven.
- This must be your main residence
- You can not own any other property in full or part
- The property must be in the UK
- Applicants must be over 18
- The purchase price or valuation must not exceed £600,000
- You need a deposit of at least 5%
- Repayment mortgages only
Are there any drawbacks to Help to Buy?
Your loan payment will increase
After the initial benefit from 5 years’ interest free, the rate of interest applied to your loan will increase each year.
Your loan isn’t fixed
The amount you repay on your Help to Buy equity loan will fluctuate with the market value of your property because it is a percentage of the value of your property
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
How to proceed
When you speak to us early in your house buying process we will be in a better position to proceed once you find your new home.
It would be helpful to have some figures to hand:
- your income
- any savings
- your outgoings
- how much you’re looking to spend.
We suggest getting an Experian Credit Report to ensure you have a good credit history, especially with a high loan-to-value mortgage.
We will then compare and source the most suitable mortgage deals for you by searching the whole of market with the aim of saving you time and money.
With our main office in Thame, our brokers are located all over the Home Counties so we’re never far from providing the help you need.