Help to Buy

What is Help to Buy?

The Help to Buy scheme is designed to help people get on the property ladder or buy a new home without a large deposit. This government scheme has four parts: Help to Buy mortgage guarantees, Help to Buy equity loans, London Help to Buy and Help to buy Isas.

In this guide, we give an overview of how each part of the Help to Buy scheme works.

Help to Buy scheme: Do I qualify?

To be eligible for Help to Buy, you must:

  • Have a deposit of at least 5%;
  • Be looking to buy a home worth £600,000 or less (different limits apply for Help to Buy Isas);
  • Be purchasing a property you intend to live in most of the time (ie not a property you intend to let out or use as a second home).

Help to Buy Mortgage Guarantee

Help to Buy mortgage guarantees can help home buyers unlock better mortgage rates. Most of the UK's biggest mortgage lenders have signed up to offer the guarantees, as well as smaller lenders.

The Help to Buy mortgage guarantee works like this:

  • You put down a deposit of between 5% and 20%, and borrow the remainder from a mortgage lender
  • The government will guarantee any mortgage borrowing above 80% of the property's value - for example, if you took out a 95% mortgage the government would guarantee to repay your lender up to 15% of its value if you defaulted
  • The property can be old or new-build
  • You don't have to be a first-time buyer to qualify

Help to Buy Equity Loan

Help to Buy equity loans are among the most popular routes into home ownership, and are only available to people who want to buy a new-build property.

Help to Buy equity loans work like this:

  • You put down a deposit of at least 5%
  • The government lends you up to 20% of the property's value as an equity loan
  • You take out a mortgage on the rest of the property's value (so, if your deposit was 5% and your equity loan was 20%, you'd then take out a 75% mortgage).

London Help to Buy

This works in the same way as Help to Buy equity loans, but buyers in London can borrow 40% of the property price from the government rather than 20%. London Help to Buy will be available from early 2016.

Help to Buy can be a little confusing. But with over 10 years experience we can help ensure your Help to Buy runs smoothly and efficiently. Call today us today  01733 203873 for a free no obligation quotation.

Below are the different types of help to buy options:

Help to Buy Isa
Help to Buy ISA’s are a type of tax-free savings account aimed specifically at people saving to buy their first home. For every £200 contributed, the government will add an extra £50 towards a deposit on your first home, up to a maximum of £3,000. This is paid to your solicitor when you're ready to move. You can use Help to Buy Isa savings to purchase a home worth up to £250,000, or £450,000 if you're buying in London.
Forces Help to Buy
If you're serving in the armed forces, Forces Help to Buy is a special part of the Help to Buy scheme which could help you to buy a property. Through the scheme, servicemen and servicewomen can borrow up to 50% of their salary interest-free to use for a deposit and other buying costs such as legal fees. The maximum loan you can get is £25,000, which you'd repay over 10 years. To be eligible you must: • have completed a minimum length of service • have more than six months left to serve when you apply • meet certain medical categories To apply you will need to go through the Joint Personnel Administration system. Talk to your chain of command or personnel agency for more information. By trusting your Help To Buy Scheme to PDR Property Lawyers, you’ll get: • Fees from £399 plus VAT and disbursements • The whole process explained from the start • Friendly and knowledgeable staff • Regular updates by phone and/or in writing as your case progresses.