Thinking that you will be stuck renting forever? Still living with your parents? Only have a 5% deposit? Are you aware of your options?
You may have heard of Help to Buy the Government Scheme brought in to help First Time Buyers or homeowners looking to move and buying a new build property up to £600,000 but are you aware that there are now two parts to the scheme?
The first part enables you to buy a new build property from a participating Developer. You can borrow up to 20% of the purchase price by way of equity loan from the Government. You have to have a 5% deposit yourself and the balance will come from a mortgage. A second charge will be registered against your property. The loan is repayable after 25 years, when your mortgage finishes or on the sale of the property whichever is soonest. No interest is charged for the first 5 years of the loan. Contact a Local Help to Buy Agent to apply.
The second and more recent part of the scheme allows you to purchase an existing or new-build property up to £600,000 and operates as a Mortgage Guarantee Scheme although as far as you will be concerned operates no differently from a normal mortgage. You take out a repayment mortgage in the usual way from one of the several major lenders signed up to the scheme for up to 95% of the purchase price. The Government offers the Lender a guarantee for any mortgage borrowing above 80% of the property value, so the banks are more willing to lend to people with small deposits. Contact lenders directly or via a broker.
The loans are subject to an affordability check and other criteria set by the Government.
Once your application has been accepted for an Equity Loan or once you have a mortgage agreed in principle you will need a conveyancer to act for you on your purchase and advise you in relation to your mortgage and/or your Government Equity loan. We can act for you and your lender and can liaise with the Government Help to Buy coordinator to ensure all the relevant paperwork is dealt with and the transaction proceeds smoothly.
For more advice or assistance on property related matters please contact our Residential Conveyancing Department on 020 8502 3991 or Sara Barnett at sarabarnett@foskettmarr.co.uk