Help to Buy Scheme
Independent Mortgage Broker specialising in the Government's Help To Buy Scheme.
Help To Buy Mortgage Advice
The government has created Help to Buy schemes such as Help to Buy Shared Ownership and Help to Buy: Equity Loan to help hard-working people like you take steps to buy your own home. Whether you are planning to buy your first home or looking to upscale from your current property, the Government’s Help to Buy schemes can assist you in purchasing a new home.
If you are wondering which scheme is right for you, this is were DJB Mortgages as a specialist Help To Buy Mortgage Adviser can assist. With a clear idea of your finances, we are qualified to research the lenders market and prepare the advice needed around each scheme. It is on us to make sure that you fully understand your options before you start researching the property market.
Help to Buy Scheme - Equity Loan Mortgage Advice
If you’re a first-time buyer in England, you can apply for the Help to Buy Equity Loan. The Government lends you up to 20% of the cost of your newly built home. What you need is a 5% cash deposit and a 75% mortgage to make up the rest. You will not be charged loan fees on the 20% loan for the first five years of owning your home.
Paying back the equity loan
When deciding if an equity loan is right for you, it’s important to consider the full cost of your borrowing:
For the first five 5 years:
> the equity loan is interest free
> you pay a £1 monthly management fee by Direct Debit
From year 6:
> pay the £1 monthly management fee
> pay monthly interest fee of 1.75% of the equity loan
> interest rate will rise each year in April by the Consumer Price Index (CPI), plus 2%
> continue to pay interest until you repay your loan in full
When you take out your equity loan, you agree to repay it in full, plus interest and management fees.
You must repay your equity loan in full:
> at the end of the equity loan term
> when you pay off your repayment mortgage
> when you sell your home
The amount you pay back is worked out as a percentage of the market value at the time you choose to repay.
If the market value of your home rises, so does the amount you owe on your equity loan. And if the value of your home falls, the amount you owe on your equity loan falls too.
For example you sold for £210,000, you would get £168,000 (80%, from your mortgage and the cash deposit) and you would pay back £42,000 of the loan (20%). You would need to pay off your mortgage with your share of the money.
Help to Buy Equity Loan price caps – April 2021 to March 2023
North East - £186,100
North West - £224,400
Yorkshire and the Humber - £228,100
East Midlands - £261,900
West Midlands - £255,600
East of England - £407,400
London - £600,000
South East - £437,600
South West - £349,000
London Help to Buy Scheme
To reflect the property prices in London, The Government has increased the upper limit for the equity loan from 20% to 40%. It gives new home buyers in London a chance to get their new home sooner than they think.
Please note that there is a restricted borrowing capacity. If you are interested in London Help to Buy Scheme, get in touch with us to discuss your maximum purchase price on this scheme.
Help to Buy Scheme - Shared Ownership Mortgage Advice
If you cannot quite afford the mortgage on 100% of a home, Government Help to Buy: Shared Ownership Scheme offers you the chance to buy a share of your home (between 25% and 75% of the home value), and pay rent on the remaining share. All you need is a 5% deposit of your share of the property. If you are not able to raise a substantial deposit, this option creates an opportunity of getting your own home. This option is avaliable for first-time buyers, homemovers and if you have owned a property before.
Do I qualify for Help to Buy Shared Ownership Scheme?
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, rising to £90,000 a year or less in London,
> you are a first-time buyer, you used to own a home but cannot 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 will need to take out a mortgage to pay for your share of the home 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 the 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.
Specialist Mortgage Brokers
To get an expert assessment of your case, talk to DJB Mortgages, a specialist mortgage broker. We have the knowledge and competence to check your eligibility, take you through the process stage by stage and find the most favourable deal to suit your circumstances and goals.