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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.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be between £399 and £599.
Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.
The Financial Ombudsman Service is an agency for arbitrating on unresolved complaints between regulated firms and their clients. More detail can be found on their website: www.financial-ombudsman.org.uk
Call: 01628 507477