Help to Buy: Equity Loan
Saving a large deposit for a new home can be challenging. It can be a long and draining process; it may even seem impossible to some people. No worries, the government has introduced a help to buy scheme to make this process easier for you.
You can buy a house at a deposit of up to 5% and have lower mortgage instalments than a standard mortgage deal. The help to buy scheme works by providing you with an equity loan of up to 15% of the property’s value from the government. This 15%, along with the 5% deposit, means you will initially only need up to 80% mortgage on your new property. This scheme is a very appealing option. However, the scheme has its own set of challenges.
We at Care Financial Services can provide free mortgage advice to support you overcome these obstacles and help you make this daunting experience much more straightforward. We will be with you at every step of the way, answering any queries that you may have and updating you on what is going on in the property market regarding the help-to-buy policy.
Our expert will provide you with free help to buy mortgage advice, which is just a phone away if you have any questions. It is helpful to have a suitable mortgage advisor to help you make your journey as smooth as possible.
NOTE: We work, as introducer, with a number of reputed, well established mortgage brokers to offer mortgage services at the best possible rates who will assist you in finding the ideal home and securing the right mortgage by utilizing their in-depth expertise in estate agency mortgage services.
More about Help to Buy: Equity Loan
Many mortgage options are available in the property market, and sometimes, it is tough to understand how well they work. We have briefly listed down some points to tell you more about help to buy equity loan schemes to make your decision-making process more manageable.
What is Help to Buy Scheme
Below we have listed some facts about the help-to-buy equity loan scheme that you should know if you are considering this option:
- The applicant requires a minimum of 5% deposit.
- Only first-time buyers can qualify for this scheme.
- The government will provide around 15% of the property’s value as an equity loan.
- The help-to-buy plan will cover the balance.
This scheme is available all over the UK. However, the rules may differ in different parts of the country. Our expert mortgage advisors can take a look at your circumstances and help you determine whether this scheme is suitable for you or not.
This scheme is divided into two projects in Scotland:
- The help-to-buy (Scotland) affordable new build scheme.
- The small developers’ new build scheme.
How It Works
As their names indicate, the first is for people looking to build a large house, while the second is for smaller-scale builders. They are both designed with similar rules to help new buyers and owners to buy a property through a shared equity agreement. Just a 5% deposit is needed, along with a 15% equity loan provided by the government for you to attain an 80% mortgage for your new home.
This scheme helps those people obtain the property of their dreams, who otherwise wouldn’t be able to afford it. The help-to-buy scheme differs from other shared equity schemes, in which you obtain 100% property ownership. The loan provided by the government is interest-free for the period of the loan ( In England, it has zero interest for the first five years)and can be paid once you have sold the property.
Give us a call today to get you a free mortgage advice at Care Financial Services and see if help-to-buy is the correct scheme for you.
Help to Buy Shared Ownership
As established above, the rules for the help to buy scheme vary in different areas. England has several other scheme options, one of which is Shared Ownership. According to this scheme, you can purchase a portion of the property from 25% to 75% of the value and pay rent on the remaining percentage. Some lenders may also allow you to buy just 10% of the valued property. If you can afford to buy larger shares later, then you can.
The equity loan scheme allows you to borrow up to 20% of the value of your new home (40% in London); hence you will only need a 75% mortgage and a 5% deposit to cover the rest. You will not be paying any interest on the loan for the first five years; this is a beneficial option for people struggling to afford a 100% mortgage.
At Care Financial Services, we try to keep up to date with all kinds of government schemes available to help our clients with their mortgage journey and make it as straightforward and less nerve-wracking as possible. Our expert mortgage advisors will be with you holding your hand at every stage of the process.
How Do You Qualify for a Help to Buy Scheme
Firstly, our experienced mortgage advisors will first study and understand your circumstances to determine whether you qualify for the schemes available. If you are eligible, our team will move on to finding you the perfect mortgage for your help-to-buy in the UK.
If you are looking for a suitable scheme that suits you, get in touch with one of our experts for your free mortgage advice consultation at Care Financial Services so that we can begin your mortgage journey with the best deals available. Different schemes come with various rules. For instance, a help-to-buy equity loan is only used for new builders with the maximum compensation. It would help if you keep in mind that the full payment can also vary by location.
For more information about the help to buy equity loan scheme,you can visit here https://www.gov.uk/help-to-buy-equity-loan.
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How Can Care Financial Services Help?
Some individuals who have found a new property they want to buy also fall under the help to buy scheme. We will look through all the paperwork and your circumstances, and if necessary, we will also help you contact the estate agent on your behalf.
We, at Care Financial Services, make it our responsibility to put our customers first and ensure them an experience full of support, honesty, and good outcomes. We try to meet every one of our clients on a personal level so that we can understand their circumstances to the best of our abilities and further provide them with the information and help that they require. You don’t need to worry about anything. Our mortgage advisors will hold your hand from the beginning of the process till the completion.
First Time Mortgage - Eligibility
Age
You should be at least 18 years at the time of the mortgage.
Deposit
You need at least 5 to 10% of the property value depending on the situation
Credit Score
You should have the bank specified credit score.
Frequently Ask Questions
If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.
The scheme is designed to help first time home buyers who cannot afford other loan-to-value mortgages due to having an insufficient deposit.
Anyone who is
- aged 18 or older
- a first-time buyer
- Buying a home in England
You must be a first-time home buyer to apply. Your new construction house purchase must fall within the local price range. Before you apply, verify that your home builder is registered with Help to Buy.
Remember while applying that you will only be eligible for this scheme if you are a first-time buyer. The line between being qualified and being declined depends on the property you are looking at and your circumstances.
Your application may also be denied if you own other properties while purchasing a new home with the help-to-buy equity loan scheme. Apart from this, you are not allowed to part-exchange or sub-let.
Furthermore, You cannot apply for the scheme if you:
- own a house or land anyplace in the world currently or in the past
- have used sharia mortgage financing in any way
- own a property you either inherited or bought with other people
- are married or be in a cohabiting relationship with anybody who owns or has owned property or land anywhere in the world, either now or after the completion of the legal relationship
- Have purchased a second house before paying down your equity loan in full
If you’re married or residing with someone else, you must submit a joint application and both of you ought to occupy the property as your primary residence.
Yes, there is a “maximum property purchase price” limit for the house you are buying, depending on the region it is located in. You can buy a house up to and including the maximum purchase price of the property.
You can visit here https://www.gov.uk/help-to-buy-equity-loan for more information about the list of regions and maximum property purchase price.
Homebuyers can submit an application at any time, however obtaining an equity loan between January and March results in somewhat lower interest rates than obtaining an equity loan later in the year.
Get in touch with us today. Our experts are always there to get you through every step to achieve the keys to your new home.
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We do not provide conveyancing. If you require a solicitor, we can help by providing you with the proper guidance and advice and notifying you about the requirements.
The dedicated mortgage advisors will put everything together for you, from giving you an estimated amount on your monthly payments for the mortgage to discussing all the necessary costs you may face.
At Care Financial Services, the customer is the boss. We make it our duty to stay with you at every phase of your mortgage journey with the most open, honest, and free mortgage advice.
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Disclaimer:
The content on this page is based on our understanding and knowledge at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. Please contact us if you require further information about the content included on this page.
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