Since the launch of the Help to Buy: mortgage guarantee, 73,726 mortgages have been completed with the support of the scheme since its inception on October 2013 and of these, 79% were purchases by first time buyers.
The Help to Buy: mortgage guarantee scheme opened on 8 October 2013 and is available across the United Kingdom. Under the scheme the government offers lenders the option to purchase a guarantee on mortgage loans where the borrower has a deposit of between 5% and 20%. The scheme can be used for mortgages on both new build and existing homes, by first time buyers, home movers and those remortgaging.
In order to qualify for a loan supported by the Help to Buy: mortgage guarantee, there are a number of eligibility criteria which are set out in the scheme rules. For example, the scheme is not available on buy-to-let mortgages or second homes and the property value must be £600,000 or less. Since 1st October 2014, no new loans with a loan-to-income ratio of 4.5 and above can be included in the scheme.
The government have recently released figures on the uptake of the Help to Buy scheme and the results show that the scheme has been most popular with those purchasing properties under £125,000 in value, followed by those in the 150,001 – 200,000.
The majority of mortgage completions through the scheme were on terraced houses, making up 39% of total completions. The next most popular property type was semi-detached properties (35%), while completions for detached houses and flats were much lower, making up 9% and 14% respectively.
In addition to the Help to Buy: mortgage guarantee scheme, there is also the Help to Buy: equity loans scheme. Equity loans are open to both first time buyers and home movers on new build homes in England with a purchase price up to £600,000.
With an equity loan, you will need to contribute at least 5% of the property price as a deposit, the government will then give you a loan for up to 20% of the price and you will need a mortgage of up to 75% to cover the rest.
You won’t be charged loan fees for the first 5 years of owning your home. In the sixth year, you will be charged a fee of 1.75% of the loan’s value and after this, the fee will increase every year in line with the Retail Prices Index, plus 1%. It is worth noting that fees don’t count towards paying back the equity loan.
To apply for an equity loan you need to contact the Help to Buy agent in the area where you want to live and you must buy your home from a registered Help to Buy builder.
If you are looking to purchase a property using the scheme, we are pleased to say that the new development of 1 & 2 bedrooms apartments at Providence House in Hook has registered and the scheme is available there.
If you need mortgage advice, please contact our dedicated Mortgage Adviser, Andrew Fagg on 07720 353866 or firstname.lastname@example.org.