Take a step onto the property ladder
The Government has created the Help to Buy scheme to help hard-working people like you take steps to buy your own home. PAD Financial can assist you in utilising the Help to Buy scheme, whether it is the Equity Loan, the Mortgage Guarantee, Help to Buy London or using your Help to Buy ISA, we work with lenders across the whole mortgage market to ensure you get the best possible advice.
Help to Buy – Mortgage Guarantee, Government Equity Scheme, ISA and London Help to Buy
Help to Buy loans are available through the Homes and Communities Agency for first time buyers and home movers who would like to buy a new build property.
A Help to Buy equity loan can provide extra money for the deposit you would like to put towards a new home. If you have a 5% deposit, through the Help to Buy equity loan scheme, you may be able to borrow up to an additional 20% (or 40% in Greater London) of the purchase price of your home. Then you would be able to apply for a Nationwide mortgage of up to 75% (or 55% for Greater London). All Help to Buy Shared Equity loans are interest free for five years. After that, you will need to pay a monthly interest fee on top of your monthly mortgage repayments. If you sell your property you will need to repay any outstanding balance on your equity loan as well.
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%). 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 ISA is an incentivised way to save towards the deposit for your first home. The Government will boost your savings by 25% up to a maximum of £3,000. You can 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. If you save £12,000, you would be eligible to receive the maximum Government bonus of £3,000. When you buy your first home, your solicitor or conveyancer will 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. 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 towards your first home.