‘Help to Buy’ his the term used for initiatives that help people buy their home. This includes the Help to Buy Shared Ownership and Help to Buy Fixed Loan initiatives, as well as being used to cover the Help to Buy ISAs that are now available to those saving property deposits.
Help to Buy ISA – for deposits
The Help to Buy ISA is offered by banks and building societies, and provides a top up of between £400 and £3,000 towards your property purchase. If you are saving for your first home, speak with your bank about whether you are eligible for the Help to Buy ISA – it tops up your savings by 25% so is well worth looking at.
Help to Buy – fixed loan
If you have saved up a deposit (typically at least 5% of the purchase price) then the Government can lend up to 20% on a Fixed Loan, to enable you to have a 25% deposit. You then raise 75% of the purchase price through a mortgage.
The 20% is repayable on a sale, but otherwise there are no charges for the first 5 years.
Help to Buy – shared ownership
The shared ownership route is aimed at those who cannot secure the 75% mortgage needed above. If this is the case, then the Government can take an equity stake in the property and you can buy them out in tranches, when you have saved funds or, more typically, where you are able to re-mortgage in the future.
There are special stamp duty land tax (SDLT) rules for this type of purchase.
The link to the Government page is here for more background information – if you are looking to buy through a Help to Buy initiative then contact us for your no obligation conveyancing quote. We are accredited under the Conveyancing Quality Scheme by the Law Society and are proud to help support many first time buyers through buying their first homes.
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