Redstones Buyers

Buying a home is no longer out of reach with Help to Buy

Recognising the difficulties many people experience in regards to buying their own home, the Government created their Help to Buy scheme to help hard-working people buy their first home or move up the housing ladder.

Help to Buy makes it possible to buy a new build or existing home valued at up to £600,000 for only a 5% deposit, making home ownership more of a reality than a dream.

With Help to Buy, the Government offers an equity loan of up to 20% of the cost of a property, so that a 5% cash deposit and a 75% mortgage is required to comprise the rest. Additionally, fees are not charged on the 20% loan for the first five years of owning the home. Please note that these rules apply to newly built homes with a price tag of up to £600,000. Within the scheme, sub-letting or part-exchange deals for old homes are not permitted. In addition, an applicant must not own any other property at the time they buy a new home with a Help to Buy equity loan.

Part of Help to Buy is their mortgage guarantee scheme, which works as any other mortgage would, except that the Government offers lenders the option to purchase a guarantee on mortgage loans. This means that participating lenders are able to offer home buyers higher Loan to Value mortgages (80-95%). Therefore, if an applicant has a 5% deposit, they will need to take out and repay a 95% mortgage.

Other options under the scheme to help people become home owners are shared ownership (part buying or part renting) and Help to Buy ISAs, where the Government helps first time buyers to save for their first home through boosting their savings by 25%. These ISAs are due to launch on 1st December 2015.

Right to Buy is also under the scheme, which enables a council tenant with a least five years’ tenancy to buy their home at a discount.

At Redstones, we regularly advise our clients on how Help to Buy can benefit them as we can see its immense value in helping enhance lifestyles, whilst providing a fantastic new home and valuable asset for the future.