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Is Help to Buy only for New Homes?

Posted on Friday, 19th February 2016 by

Is this a question that has been playing on your mind?

Is help to buy only for new homes?

 

 

 

 

 

 

 

An article posted by the Telegraph stated that a third of first time buyers do not fully understand the Government Help to Buy scheme. If this is the case for you, below are the general points:

  • The Government has introduced Help to Buy schemes to help people buy their first home.
  • There are two schemes available.

Help to Buy Equity Loan

The first is known as a Help to Buy Equity Loan. This can only be used for new build homes and to be eligible this must be the candidates only home and is generally aimed at those with small deposits.

You will need to have at least 5% deposit of the property price. The Government will 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.

The important thing to remember with this scheme is that it only applies to new build properties and you must pay back the loan after 25 years or when you sell your home – whichever is earliest. The amount you pay will depend on the market value at that time and therefore it could be more than what you have borrowed in the first place.

Mortgage Guarantee Scheme

The second scheme is the Mortgage Guarantee Scheme. This can be used on either old or new properties. This scheme is useful if you are after a pre-owned home. You will need to have a minimum of a 5% deposit and you must occupy the property and it must be your only property. As long as you can pass the credit checks then the rest is on par with the scheme. Another thing to note is that the scheme only applies to repayment mortgages. Interest-only and self-certified mortgages are not included.

Both schemes are open to both first-time buyers and home movers.

If you would like to talk to someone about these Government schemes or any other conveyancing matter please do not hesitate to get in touch with the conveyancing team in Leicester on 0116 266 5394.

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer.  If you are interested in obtaining advice, please contact one of our solicitors who will be happy and able to advise you on your own particular circumstances.

Talk to our legal team

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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