As a first time buyer, one of the most worrying things is always whether or not you’ll be approved for a mortgage. With it becoming increasingly common for first time buyers to be turned away due to not having a sizeable enough deposit or as a result of their income being too low for the property which they want to buy, the government have stepped in to offer their assistance and the recent General Election saw David Cameron pledge to continue the scheme for the foreseeable future.
This assistance comes in the form of the ‘’ scheme, introduced in October 2013 to give an extra helping hand to first time buyers looking to get onto the property ladder. To find out more about the scheme and how it can help, we teamed up with .
What Does ‘Help To Buy’ Offer?
If you’re a first time buyer, the Help To Buy scheme is fantastic news! Whilst there’s two parts to the scheme, it’s the ‘’ arm to it which is of most benefit and, in short, offers first time buyers the opportunity to own their own home with as little as a 5% deposit.
In the words of the scheme themselves, “with a Help to Buy: equity loan the Government lends you up to 20% of the cost of your new-build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest."
As you can see, with an equity loan, you’ll only need to put down a 5% deposit but will similarly only need a mortgage for 75% of the property price. The government will lend you 20% to allow you to get a mortgage with lower monthly repayments and, in many cases, be eligible to buy a house which is higher priced than you could usually afford. There’s no interest at all payable on the 20% for five years.
Who Can Get An Equity Loan?
In short, any first time buyer is eligible for an equity loan so long as they’re buying a new-build home up to the value of £600,000. There’s few other restrictions on the scheme and it’s fantastic that the government are backing such a great offering.
As far as we’re concerned, ‘Help To Buy’ gives would-be first time buyers a real chance to get themselves onto the property ladder whilst only needing to save up a 5% deposit. In many instances, families are happy to gift a deposit of that value, however for those in rental accommodation, it’s saving up the rest which is the hard part. With Help To Buy, the dream of becoming a home owner becomes a reality and could see you in your brand new home in weeks!