Buying a house can be difficult at the best of times – the housing market is forever changing, with house prices rising on a regular basis. However, the Help to Buy Scheme might make it much easier for you to buy a house if you’re a first-time buyer.
But what exactly is the Help to Buy Scheme? And who is eligible? How do you access the scheme? Keep reading for our guide on the Help to Buy Scheme to help you on your house purchasing journey.
What Is The Help to Buy Scheme?
Help to Buy is a government scheme that helps first-time buyers purchase their first property. There are certain eligibility criteria that we’ll cover in the next section, but the main requirement is that it must be your first home.
It enables first-time buyers to purchase a property with just a 5% deposit, which makes it much easier to secure your first home.
With the Help to Buy Scheme, you can borrow 20% of the purchase price of the home interest-free for up to five years. However, house prices are typically much higher in London, so in London, you can borrow 40% of the purchase price.
After the first five years, the interest rate will rise from 0% to 1.75% in monthly payments – which will be applied to the loan you originally borrowed.
You can apply to the Help to Buy Scheme until the end of March 2023, but any applications made prior to this will still stand.
Who Is Eligible?
There are a few requirements to be eligible for the Help to Buy Scheme. The key requirement for the Help to Buy Scheme is that it must be your first home.
If you’ve ever owned a home or even residential land, regardless of whether it’s in the UK or not, then you won’t be accepted for the Help to Buy Scheme. The same applies if you’ve ever had a Sharia mortgage.
You must also be over the age of 18, and be able to pay for fees and interest payments associated with a Help to Buy Mortgage.
You can apply for the Help to Buy Scheme regardless of whether you’re purchasing alone or with others. However, any applicants must meet the eligibility criteria – be over 18, and it be their first home.
If you’re applying as a married couple or you simply plan on living together with your partner, then you should make a joint application.
As well as personal eligibility criteria, the property you’re purchasing must also meet certain criteria. The property you’re purchasing must be a new build – so nobody can have lived in it before you purchase it.
You must also check that the homebuilder is Help to Buy registered. The home you’re purchasing through the Help to Buy Scheme should also be the only home you own and the only home you live in.
There are also maximum purchase prices depending on where in the UK you live – so be sure to check your local property purchase limit when you’re looking for a home to buy.
To apply for the Help to Buy Scheme, simply contact an agent in your local area. If you live in Liverpool, then we can help you find the perfect Help to Buy equity loan and streamline the process for you as a first-time buyer.
Purchasing a home can be stressful – but it doesn’t have to be even more stressful just because you’re a first-time buyer. Let us guide you through the process.
What About Paying Back The Equity Loan?
You can pay back your equity loan any time you like – but it’s important that you get a market valuation report from a surveyor when you decide to make a repayment.
The smallest loan repayment you can make is 10% of the market value of the house. Paying back some of the loans will lower the interest payments that you need to pay after the fifth year of the Help to Buy Scheme.
The Help to Buy Scheme typically gives you 25 years to repay the loan – so you must ensure that the equity loan is fully paid by the end of the loan period.
You must also have paid off the mortgage if you plan on selling the property. However, this isn’t as daunting as it sounds, as you could simply move your mortgage.
For any help with purchasing a house, get specialist house purchase advice today.
Liam Coker is a highly skilled mortgage and protection specialist who delivers excellent customer service. His knowledge of the mortgage industry is key to finding the correct solution for people’s specific needs.