Government Schemes for First Time Buyers
All you need to know about Government Mortgage Schemes for First Time Buyers
First off, these schemes offer financial support to get you on the property ladder. Property prices have certainly rocketed and with an increase in interest rates it’s becoming increasingly more difficult for the First Time Buyer market. No wonder some people feel like it’s simply an impossible dream!
Never fear with over 75 years’ joint experience in the mortgage advisory game here we are here to give you free advice and guide every step of the way.
Luckily there are certain Financial Government schemes out there still that aim to make securing a mortgage easier for the first-time buyer.
Below we have listed the 3 most beneficial schemes available that First Time Buyers should take full advantage of why they last!
1. Help to Buy: Equity Loan
The Help to Buy: Equity Loan launched on 1 April 2021 and is in place to aid first-time buyers who are looking to purchase a new-build home only.
Eligibility criteria:
1. first-time buyer over the age of 18
2. the property has to be sold to you by a Help to Buy registered housebuilder
3. it has to be the only home you live in
This scheme will run until March 2023.
Important pointers:
· There is a sliding scale of the value of the maximum property purchase price dependant on where you live. Click here for more
· You pay a minimum of a 5% deposit, a repayment mortgage of at least 25% of the property is agreed
· You can borrow the equity loan to cover 5%-20% of the property value, and if in London up to 40%.
· The equity loan is calculated with interest you pay, plus the equity loan repayments.
2. Shared Ownership Scheme
This scheme allows you to buy a percentage of the property and pay rent on the rest.
The share owned by you tends to range between 25%-75%, some homes actually allow you to purchase as little as 10% of the property
Eligibility criteria:
· You and a partner if buying will need to be on less than £80,000 per year
· Prove that you can afford the deposit and mortgage repayments
· Prove you are a first-time buyer, or that you use to own a home but can no longer afford a new one
Important pointers:
· You can purchase more of the property once you are a partial owner if you want to. This process is called staircasing and allows you to buy 5% or more of your home at any one time.
· If you decide you want to sell the property the landlord has first dibs on buying it themselves, however if they are unable to find another buyer, you can sell your share of the house yourself.
· If you have acquired 100% of the property you are able to sell your house as normal For more details click here: https://www.gov.uk/affordable-home-ownership-schemes
3. The Mortgage Guarantee Scheme
The mortgage guarantee scheme allows first time buyers to put down 5% deposit and secure a mortgage on the remaining percentage of the property value.
The scheme is open to new 95% mortgages until 31 December 2022.