Learn more about the Housing Association scheme: Help to buy
As promised, here is an attempt to breakdown in simple terms another government housing scheme.
If you are actively seeking to climb up the property ladder right now, then I’m sure you’re continuously bombarded with the phrase ‘help to buy‘. I mean, it’s everywhere. Do bear in mind that it’s a marketing tactic, so I would advice that before going this route, you are fully aware of all possibilities related to this scheme. I believe there is an Help to buy event for beginners so if you are interested, do attend.
This post is just a brief explanation to enable you to have a grasp on the term. ‘Help to buy’ literally means what it says. The government will help you to buy 100% of the property (unlike shared ownership).
For example, if you wanted to buy a house worth £200,000 under the Help to buy scheme, you’d only be required to fork up a 5% deposit of £10,000. The government will provide a 20% Equity Loan (40% in London) of £40, 000 and you’ll get a 75% mortgage meaning once the house is purchased, you legally own 100% of the house.
The Help to Buy Equity Loan (£40,000 in the example above), remains interest free for the first 5 years, after that an interest rate of 1.75% is applied and increases every year with inflation. The loan is repayable after 25 years and bear in mind that there is also a £1 administration fee every month to be paid.
Good news is, anyone who intends on buying a new build home is eligible, however the house you intend on buying must be your only home at the time of purchase.
You can find key information on the official Help to buy website.
There are a few more options you might want to consider.
A good starting point will be Google…