Help to Buy Mortgages
You may be thinking which one is right for me and this is were DJB Mortgages can help, we can give you the advice needed around each scheme and make sure that you fully understand your options before making a decision.
A great this about one of the schemes 'Help to Buy Equity Loan' is it's only on New Build properties and there’s nothing quite like the moving into a home that’s never been lived in before, the smell of fresh carpets and gleaming walls.
Although the layout of new homes is pre-determined you do get the buzz of designing the interiors – often right down to the style of door handles.
Buying a new home often comes with its own stresses and strains, and it's not unusual for the housebuilder/developer to make you exchange contracts and place down your deposit within 28 days of agreeing to purchase it. In many cases, the house has not even been built yet, this is called buying ‘Off-Plan’ whereby you will only be able to view the proposed new home through brochures and virtual tours.
There is often a show home to give you some idea of the finished design.
Help to Buy - Equity loan
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;
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.
London Help to Buy
To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.
Please contact us for further information, and we shall discuss your maximum purchase price on this scheme as the Government restrict borrowing capacity to individual situations.
If you can’t quite afford the mortgage on 100% of a home, Help to Buy: Shared Ownership offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. This is also a great way of being able to buy a home if you are not able to raise a substantial deposit, as you only need a 5% deposit of your share of the property.
Later on, you could buy bigger shares when you can afford to and this is known as 'STAIRCASING'.
You could buy a home through Help to Buy: Shared Ownership in England if:
your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
you are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.
With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the home’s purchase price or fund this through your savings. Shared Ownership properties are always 'LEASEHOLD'.
Only military personnel will be given priority over other groups through government-funded shared ownership schemes. However, councils with their own shared ownership home-building programmes may have some priority groups, based on local housing needs.