Getting on the property ladder is an exciting experience for young people and first timers. There is so much information and advice out there and coming in with a base level of knowledge can be intimidating. So where should you start?
Our expert team have knowledge and experience with Help to Buy mortgages and can provide a starting point for your journey into homeowner life.
What is a Help to Buy mortgage?
A Help to Buy mortgage is a great option for first time buyers, with a small deposit amount of 5% required and a loan of up to 20% provided by the government. These statistics make the amount left to borrow from a mortgage provider significantly less.
What is a Help to Buy equity loan?
Having a bigger deposit gives you an advantage when looking for a good mortgage rate. A Help to Buy equity loan can be used by individuals who are struggling to save for a deposit by providing them with up to 20% of the property’s worth. This only applies to new-build properties worth up to a maximum of £600,000.
The loan will begin to incur interest after 5 years.
What if I don’t want a new-build property?
Shared ownership is also an option in the Help to Buy scheme that allows you to buy a share of a property and pay rent on the remaining share. This could be between 25% and 75%, which could change over time depending on what you can afford.
Whether you are a first time buyer or previous homeowner looking for a more affordable option, shared ownership can make paying off a mortgage more comfortable and suited to your income.
Questions & Answers
If you aren’t able to raise a bigger deposit and are an existing homeowner you could be eligible for a Help to Buy mortgage. This involves an equity loan scheme and requires a deposit as low as 5%. However this is changing from April 2021 and will only be available to first time buyers.
The deposit amount required is the main difference between a standard and Help to Buy mortgage. With a much lower deposit, it will be possible to purchase a property much quicker than applying for a standard mortgage.
The more deposit you can provide the less you will need to borrow from a lender. This can also entitle you to more appealing mortgage rates.