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Need Help to Buy?

Friday, March 03, 2017

“Help to Buy” is a much discussed topic these days but there still seems to be a great deal of confusion about how it works and who is eligible. We have compiled this article with the most recent updates from www.helptobuy.gov.uk to try to help simplify the process so you can explore it as an option for you.

How does it work?
With a “Help to Buy: Equity Loan” the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

Example:
For a home with a £200,000 price tag - the buyer would pay £10,000 deposit (5%), the government would contribute a £40,000 loan (20%) and you would need £150,000 from a commercial lender (75%)

If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money. For people buying specifically in London there are differences and for more information (including advice on fees and paying back your loan) please download our Help to Buy Buyers’ Guide (PDF). and get more informaion at: www.helptobuy.gov.uk

Who is eligible?
Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000. You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with a “Help to Buy: Equity Loan”.

This scheme is available in England only. The Scottish Government, Welsh Government and Northern Ireland Housing Executive run similar schemes – check out their websites.

How to apply?
The Help to Buy: Equity Loan scheme is run by Government-appointed Help to Buy agents. They can guide you through your purchase, from providing general information about the scheme to dealing with your application. Or look out for the Help to Buy logo on new-build developments and ask about the scheme there. You can get more help and advice from the Money Advice Service and other useful contacts. Plus you can check out the frequently asked questions page on the government's website www.helptobuy.gov.uk

In addition our highly recommended mortgage advisor offers free information appointments and is on hand to talk you through the best options for your individual circumstances. Call us today to arrange an appointment.

Important Information
All property sales and the financial advice that surrounds them are as unique as the people engaging in the transaction. It is important to not make a decision without seeking professional advice.  

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