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Published on : February 19, 2019 09:52


Help To Buy scheme: Everything You Need To know

Help to Buy is a government scheme which can help first time home buyers get a property with just a 5% deposit.

The Help to Buy scheme offers an equity loan where the government lends first-time buyers and existing homeowners’ money to buy a newly-built home.

Here is an example:

Cost of home – £200,000

Deposit – 5% @ £10,000

Equity Loan – 20% @ £40,000

Mortgage – 75% @ 150,000

Help to buy schemes

Help to Buy: Shared Ownership

This is available to first-time buyers, those who used to own a home but can’t afford to buy one now, or existing shared owners looking to move.

The scheme gives you the chance to buy a share of between 25% and 75% of the home’s value, and you then pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to.

England – Help to Buy: Equity Loans

These are available to first-time buyers as well as homeowners looking to move. The home you want to buy must be a new build costing up to £600,000.

The Government will lend you up to 20% of the cost of the home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

Forces Help to Buy

This allows service personnel who are first time buyers or homeowners looking to move to borrow up to 50% of their annual salary, to a maximum of £25,000.

This can be used towards a deposit and other costs such as solicitor’s and estate agent’s fees. All regular service personnel are eligible who:

–          Have completed the pre-requisite length of service, have more than 6 months left to serve at the time they apply

–          Meet the right medical categories.


What are the costs involved?

Valuation fee

Lenders may ask you to pay the valuation fee. The type of valuation you choose will depend on factors such as the age and condition of the property.

Application/Arrangement fee

This is the costs your lender will charge you for arranging your mortgage. Some lenders will allow the fee to be added to your mortgage, but this means you will be charged interest on it over the term of the mortgage

Legal costs and fees

The fees charged by a solicitor include the charge for conveyancing (the transfer of ownership of land), and the costs of legal registrations and miscellaneous costs (known as disbursements) such as Local Search fees and Land Registry fees. Some lenders may offer to finance some or all of the legal costs as an incentive.

Higher lending charge

If the amount you wish to borrow is greater than a certain proportion of the property’s value (typically 75%), you may incur a higher lending charge

Early repayment charge (ERC)

Lenders may charge an ERC if you make an overpayment in excess of any stated limit, if the loan is repaid early or you remortgage during early repayment period. This can sometimes be a significant amount, so you should always check the terms in the offer letter from your lender.

Deeds release or exit fee

Lenders may charge a fee to release the deeds of a mortgaged property to you or a new lender.

If you’re looking to get on the property ladder or looking to relocate, why not have chat with one of our friendly mortgage advisors and they can help get you moving. Click here for more information.

Your property may be repossessed if you do not keep up repayments, on a mortgage or any other debt secured on it.
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