Whether you are a first-time buyer or looking to move on from your existing home, Help to Buy could make your purchase easier and more affordable than ever before.
How it works
With an equity loan:
Equity loan fees
You won’t be charged loan fees for the first five years of owning your home. In the sixth year, you’ll be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year, at a rate of 1% above the retail price index.
Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You’ll also be sent a statement about your loan each year.
Fees don’t count towards paying back the equity loan.
Selling your home and paying back the loan
You must pay back the loan after 25 years or when you sell your home – whichever is earliest. How much you pay back will depend on the market value at that time.
You can pay back part or all of your loan at any time. The minimum percentage you can pay back is 10% of the market value of your home. The amount you pay will depend on the market value at that time.
You won’t be able to sub-let your home if you use this scheme. It must also be your only property.
For those in search of a mortgage without the need for an equity loan, the Mortgage Indemnity Scheme could be just what you are looking for.
Customers who are not eligible for Help to Buy may still be able to afford their dream home, as the Mortgage Indemnity Scheme is available to a huge number of buyers, including those who already own another property.
To find out if the Mortgage Indemnity Scheme could help you buy a new build home, contact Lancet Homes today.