If you want to own your own home but are unable to afford 100% of the mortgage, the ‘Help to Buy’ scheme could help. Offering you the chance to purchase between 25% and 75% of the value of your property, or take out an equity loan or start an ISA, the chance to get onto the property ladder has been taken by thousands of buyers since the scheme launched in 2013.
Help to Buy ISA
If you want to save towards your home and you’re a first-time buyer, you can take out a Help to Buy ISA. The Government will boost your savings by 25% up to a £3000 bonus. You can save up to £200 a month and open your Help to Buy ISA with any high street bank. The good news is that if you plan to buy with other first time buyers, you’re each entitled to open an ISA and receive a £3000 bonus.
Help to Buy shared ownership
The shared ownership scheme is open to:
• First-time buyers
• People who have previously owned a property but can’t get back on the ladder
• Buyers looking to move on from shared ownership
• Households earning less than £80,000 outside London or less than £90,000 in London
Shared ownership properties are always leasehold and made available for sale through a housing association. You’ll own between a 25% and 75% share of your home, paid for with a mortgage, with the option to own 100% of your own home when you’re in a financially stable position.
If you’re 55 and over you can benefit from the Older People’s Shared Ownership scheme which allows you to buy up to 75% of your home, at which point you’ll no longer pay rent. There’s also a Home Ownership for People with Long-Term Disabilities scheme.
Help to Buy equity loan
This scheme is set to run until 2020 and is available on new build properties only. The Government will lend you 20% of the cost of your new home which means you need to provide a 5% cash deposit and raise a 75% mortgage.
The Government equity loan is interest and fee free for 5 years, after which time you’ll be charged as follows:
• Year 6: you’ll pay a fee of 1.75%
• Year 7 and onwards: you’ll pay 1.75% + the rate of inflation based on the
Retail Prices Index + 1%
When you come to sell your property, or you pay off your mortgage, you’ll repay the equity fee plus a share of the increase in the value of your property. However, you can pay back some or all of the equity loan at any time.
To find out more about Help to Buy contact your local agent who’ll let you know available schemes in your area.
At Blackmore Homes we put property ownership at your fingertips, so contact us today for more details of our residential developments countrywide.