You may have heard of the Help to Buy scheme, a government scheme that aims to help first-time buyer to buy or build a new house or an apartment. As of April 1st, 2021, the criteria for the Help to Buy Equity Loan Scheme have become much more specific. The rules that are now in place will remain until March 31st, 2023. Here we will look into the process, who is eligible, how repayments work and what the scheme aims to do. If you are looking into the various options for owning a home or property for the first time but don’t have enough money to put down on as a deposit, this scheme is here to help people just like you! There are mortgage companies and advisers who can talk you through the process and make sure that you are getting the best deal.
What Does the Help to Buy Scheme Do?
The Help to Buy Scheme means that you as a homebuyer can borrow up to 20% of the cost/purchase price of a newly built home from the government. The homebuyer must themselves have a deposit of at least 5% of the purchase price. There are caps set regionally which means that the new-build home must not be worth more than the price cap in the region that you’re buying it in. These price caps vary from region to region.
The Repayment Process
These loans are interest-free for the first five years; in year six repayments must begin. The loans are borrowed from the government and must be paid back as well as any mortgage that you may have taken out. They last for 25 years and must be repaid when you come to sell your house or at the end of your mortgage term.
In the help to buy repayment process a company such as Sam Conveyancing can help you in repaying the loan in different ways. The help to buy repayment process can be done in several different ways – in full upon sale, in full without selling and through staircasing, which involves incrementally increasing the percentage of your home that you own.
Who Is Eligible for the Help to Buy Scheme?
The aim of the scheme is to help first-time buyers who are otherwise unable to have access to affordable loan-to-value mortgages due to having an insufficient deposit for the house. The aim is to get more people into home ownership who otherwise wouldn’t be able to afford a property. If you put down a larger deposit than 5%, your repayments may become more affordable.