Help to Buy

HELP TO BUY: Equity Loan

What is it? 
Help to Buy: Equity Loan government scheme is designed to aid first time buyers and home-movers with purchasing a property. The scheme is for new builds only, valued under £600,00. It is designed to help when purchasers are struggling to find a full mortgage deposit. How it works is as follows; the Government lends the buyer up to 20% of the cost of the property, and this allows applicants to pay only a 5% deposit. That leaves the buyer having to find a mortgage of up to 75% to make up for the remainder of the purchase price. 
If you decide that this method would be the perfect fit for you in order to buy your dream home, speak with one of our advisers today. Read on to find out more about the scheme. 
For the first five years, you will pay no interest on the 20% loan, which will help with the burden of finding a deposit. In the sixth year of the mortgage, you will pay 1.75% P.A (of the equity loan) as interest. It will then increase each year in line with the Retail Price Index (RPI). 
The equity loan must be repaid after 25 years. If you sell your home this will be earlier. You must also repay any percentage of equity increase back to the government. 

Can you qualify?
The scheme is open to all buyers who are interested in purchasing a new build property however, the property you purchase through the scheme must be your only residence. It is NOT available to buy-to-let investors or those renting and wanting to buy a second home.
Buyers outside of London must be able to fund 80% of their home through a mortgage and a deposit. London buyers must be able to fund 60% through a mortgage and a deposit. 
As mentioned above, the buyer MUST provide a minimum of 5% deposit, this 5% can be from a family gift, a builder’s gift or incentive, Force’s help to buy or from the applicants own resources. The property must have a value below £600,000.
Buyers who require a main mortgage of more than 4.5 times their household income cannot use the scheme.

The Help to Buy scheme requires you to provide a deposit, however it will be smaller. The government lend you an Equity Loan of up to 20% of the cost of the property, leaving 5% needed for a deposit and the remaining 75% to be made up via a mortgage.


If you think this scheme is the right fit for you, call View Finance on 0333 320 8658 or e-mail [email protected] for advice from one of our experienced brokers.
 

If you would like to find out whether or not you are eligible to apply for a mortgage, or would just benefit from some more information on Mortgages then contact us today on                  

Call 0333 320 8658

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Send an email to [email protected] and one of our advisers will be happy to speak with you.

 

AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.  THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. View Finance Ltd is an Appointed Representative of Finance Advice Group Ltd, which is authorised and regulated by the Financial Conduct Authority under number 624517 in respect of mortgage, insurance and consumer credit mediation activities only. The Financial Conduct Authority does not regulate some form of mortgages and loans, including most types of Buy to let mortgages and also Limited Company lending. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. Registered office address: 42 Friar Gate, Derby, DE1 1DA. Registered in England and Wales, company number 11265177.

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