Thursday, 27 October 2016

Help to Buy - What you need to know

You might have seen the recent news that the government will not be extending the Help to Buy: Mortgage Guarantee Scheme from December this year, but what does that actually mean and more importantly what does it mean for you?

Firstly, don’t panic. While the Help to Buy: Mortgage Guarantee Scheme will no longer be available, you will still be able to use the Help to Buy: Equity Loan to purchase a new St. Modwen Homes’ property with a deposit of just 5%.

Available on new-build homes up to the value of £600,000, using the Help to Buy: Equity Loan you pay just 80% of the listed property price, which is made up of a 5% deposit and a 75% mortgage, with the remaining 20% covered by a government loan. For example, if you bought a new home priced at £200,000, you would need a deposit of £10,000, a £150,000 mortgage and a £40,000 loan from the government.

50% of our purchasers use this scheme, and it’s not just for first time buyers, those moving up the property ladder also qualify. You just won’t be able to rent out your new home or use Part Exchange to sell your old home and you must not own any property when you use Help to Buy: Equity Loan to buy your new home. 

So what is the Help to Buy: Mortgage Guarantee Scheme and why is it not being continued? Unlike the Help to Buy: Equity Loan, the Help to Buy: Mortgage Guarantee Scheme applies to both new-build and existing homes, with the government providing a guarantee to the lender to offer higher value mortgages of up to 95%. Since Help to Buy was introduced in January 2014, the housing market has become less reliant on the government guarantee and over 30 lenders now offer 90 to 95% mortgages outside of the scheme.

If you want to know more about Help to Buy: Equity Loan and see if you qualify, speak to a member of our Sales Team in the Sales and Marketing Suite at your local development and they’ll be happy to help by putting you in touch with one of our Independent Financial Advisors who will talk you through the process, help you find the right mortgage for you and even complete all the paperwork. 


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