A Help to Buy equity loan is part of the Government’s initiative to help both existing homeowners looking to move and first-time buyers trying to get onto the housing ladder. The scheme was started to help make up the difference between a homebuyer’s deposit and the deposit required by lenders before they will consider granting a mortgage.
You put down a 5% deposit and the government loan you a further 20%. This portion is known as the ‘equity loan.’ You would need to borrow the remaining 75% from a mortgage lender in the normal manner. For example, if you bought a new home for £200,000 and you had £10,000 to put down, the scheme would allow you up to £40,000 as an equity loan. Your mortgage would make up the difference, namely £150,000.For more details of this watch the video here.
If you later sold the property for £210,000 in a few years time, you would have made a gain of £10,000 on the home’s value. When you sell the property you’d pay back whatever is still owed under the mortgage and the equity loan provided by the government (£40,000). In addition, you’d pay the government an additional £2,000 which would be their share (20%) of the gross increase (£10,000) in the original home’s value (£210,000 - £200,000).
For more details download the Help to Buy Guide.
The scheme is only available on new build homes up to £600,000 and to be eligible the borrower must not own any other property at the time that they apply for the Help to Buy loan. You cannot rent out the property bought and you cannot part-exchange your existing property for the new one you are buying with the help of the loan.
Mortgage Required have partnered with Help to Buy South. We can quickly arrange loans for the purchase of your new home. To check if you are eligible for a Help to Buy Loan ask us for details.
For more details on the various Government Schemes available through Mortgage Required contact us or speak to a mortgage adviser on 01628 507477.
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
2 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
7 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
10 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
11 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
16 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
25 days ago
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
25 days ago
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.