Help to buy

Found your dream home but can't raise the deposit? You might need Help to Buy.

The basic principle of Help to Buy is that the government helps you raise the deposit you need for your home by providing a loan for 20% of the property value on the assumption you have 5% already available.

 

 

This puts you in a considerably stronger position when applying for mortgages, as you only require a 75% LTV (Loan To Value) deal.

 

 

In the eyes of the mortgage lenders, this means you’re a lower risk customer to them, which subsequently opens up more competitive interest rates.

 

 

The government-provided loan is completely interest-free for the first five years.

 

 

After the fifth year, interest will be charged at 1.75% per year (and will increase alongside inflation+1%).

 

 

The loan also needs to be repaid within 25 years, but this can happen when you sell your home (assuming it’s within the 25 year period).

Whether it’s repaid at the time of your house sale or before (part-payments can be made), the repayment amount is based on the value of the property at the time.

 

Who is eligible for Help To Buy?

 

 

Anyone can apply for Help to Buy.

 

 

However, as you’re going to be taking out a mortgage, to need to ensure:

 

 

•    You can afford the repayments;

 

•    You have a 5% deposit available.

 

 

However, there are also a number of stipulations that apply if utilising Help To Buy, including:

 

 

•    You cannot sublet your home (i.e., move out of your home and have someone else move in and pay you rent);

 

•    The property which Help to Buy applies to must be your only home.

 

 

Help to Buy has already helped many move into a new home that they wouldn’t have otherwise been able to due purely to not having the necessary deposit.

 

 

To check your eligibility and discuss further with one of our knowledgeable and experienced advisors, contact us today.