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Help to Buy

HELP TO BUY

The government has launched various Help To Buy (H2B) schemes in recent years. AscentiaUK can advise you on the various schemes available and are specialists in placing and arranging mortgages for applicants choosing to participate in the Mortgage Guarantee scheme, Shared Ownership schemes and H2B ISA schemes.

Help to Buy Equity Loan scheme – Overview:

With a Help to Buy Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

This scheme is available in England only. For people buying in Scotland or Wales similar schemes are available.

The Help to Buy Equity Loan is interest free and carries no fees for the first five years. From year six a fee of 1.75% is payable on the Equity Share Loan, which rises annually by RPI inflation plus 1%. The Equity Share Loan can be repaid at any time within the term of the mortgage, or on sale of the property.

NB. London Help to Buy: To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.

The Help to Buy Equity Loan scheme is run by Government-appointed agents who are appointed by the Government’s Homes and Communities Agency.

They can guide you through your purchase, from providing general information about the scheme to dealing with your application. Your local Help to Buy agent can guide you through the options available and explain the eligibility and affordability criteria.

Help To Buy Mortgage Guarantee scheme – Overview:

A mortgage supported by the Help to Buy: mortgage guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans. Because of this support, lenders taking part are able to offer home buyers more high loan-to-value mortgages (80-95%).

Your lender will check that you can afford the mortgage and that you do not have a history of payment difficulties.

You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.

The Help to Buy Mortgage Guarantee scheme helps home buyers with good credit records who can afford to purchase the property outright with a deposit as low as 5%. These include First Time Buyers, trying to get onto the property ladder, and ‘second-movers’, needing to move up the ladder to a bigger home.

These loans are not available for buy-to-let landlords or second home owners or for a shared ownership purchase.

They can guide you through your purchase, from providing general information about the scheme to dealing with your application. Your local Help to Buy agent can guide you through the options available and explain the eligibility and affordability criteria.

Help To Buy ISA – Overview:

If you are saving to buy your first home, you can save money into a Help to Buy ISA and the Government will boost these savings by 25%. So, for every £200 you save, you will receive a government bonus of £50. The maximum government bonus you can receive is £3,000. You can choose to save money into an ISA available from the range banks and building societies.

The accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 (£3,000 per person)towards your first home.

You are permitted to save up to £200 a month into your Help to Buy ISA and to kickstart your account, in your first month, you can deposit a lump sum of up to £1,200. The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.

When you are close to buying your first home, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home.

To learn more about the various government Help To Buy initiatives and find out how we can help you, please contact us or view our handy Help To Buy FAQ’s and our Affordable Housing FAQ sheets.

Not all products and services mentioned are regulated by the Financial Conduct Authority
The guidance and information contained within this website is subject to the U.K. regulatory regime and is therefore primarily targeted at customers in the U.K.
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