Help To Buy is a Government scheme that allows you to buy a New Building property with a smaller deposit, and an Equity Loan that the Government will lend to you.
Typically the Government will lend you 20% of the Purchase Price, you will put a minimum of 5% cash deposit, and the Mortgage will be 75% to make up the difference of the purchase price.
There is a separate scheme for the London Area, where you can borrow up to 40% of the Purchase Price.
On the 31st December 2016, the Help to Buy Mortgage Guarantee Scheme closed. Mortgage Lenders are offering 95% Loan to Value schemes without the need for Government intervention - please ask for details.
In this example, the Purchase Price is £200,000. The Buyer has a £10,000 Deposit, and through the scheme the Government will provide 20% (£40,000) of the purchase Price. Therefore, the mortgage needed will be £150,000.
No Interest is charged on the £40,000 loan for the next 5 years, a small amount is charged from Year 6.
Should you sell or wish to purchase this Government Share (20%) at a later date, the property will need to be re-valued to calculate the cost (or value) of that 20% Share.
For example, if the property has increased in value form £200,000 in this example, to £220,000 - then the share now becomes £44,000 to repay.
In February 2016, the scheme was adjusted to accommodate the cost of property in London and London boroughs. the Equity Loan limit was increased from 20% to 40% of the Purchase price.
As with the normal version of the scheme, Interest is not charged on the Equity for the first 5 years, the 40% Loan will need to be repaid on sale or should you wish to own 100% of the property.
The Help to Buy scheme is available to First Time Buyers and Homeowners, but you must not own any other property, nor look to Part-Exchange your current property. We have a number of lenders that support the Help to Buy Scheme, please let us know if you would like some further details (and check what you can afford to purchase)
The criteria for a Help to Buy Mortgage is a little more involved, given that you need to have both the Mortgage Lender and the Scheme Provider both agree that the mortgage is affordable. As such, we would recommend you complete our On-Line Application so that Essex Home Finance can assess your specific circumstances, check what you can borrow and that you qualify for the Help to Buy Scheme.
You can do this by going to : Essex Home Finance Online Application
Or you can email or call us - 01245 398466 or firstname.lastname@example.org
Essex Home Finance Ltd
1 High Street
01245 398466- Office Number
Essex Home Finance Ltd is an Appointed Representative of Mortgage Intelligence Ltd which is authorised and regulated by the Financial Conduct Authority under number 305330 in respect of mortgage, insurance and consumer credit mediation activities only.
Registered address: 1 High Street, Chelmsford, Essex, CM1 1BE. Registered in England & Wales under number 10607263.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*From the 1st March 2018, We do not charge any Broker Fees for Residential First Time Buyers, Residential Home Movers, Residential Remortgage, and all Product Transfers (Residential or Buy to Let).
There will be a fee for all Buy to Let Purchase and Buy to Let Remortgage cases. Typically our fee will be £149, payable on Offer. We will agree any fees with you before we proceed with your case.
We always aim to provide a high quality service to our customers. However, if you encounter any problems and we are unable to resolve them you can take your complaint to an independent Ombudsman.
Our advice is covered under the Financial Ombudsman Service. You may be able to submit a claim through the EU Online Dispute Resolution Platform If you live outside the United Kingdom or if you prefer not to deal directly with the Financial Ombudsman Service.