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Archive for June, 2015

Help 2 Buy

Tuesday, June 2nd, 2015

Did you know that can now buy your first home with just 5% deposit?

But you’ll need to be quick because the Govt Help to Buy Scheme 2 ends in December 2016.

The scheme enables first time buyers to borrow up to 95% of the purchase price of a new-build or existing property.

For a property valued at £200,000 that would mean a first time buyer could get onto the housing ladder with a deposit of just £10,000.

conveyancing-conveyancingfees-conveyancingsolicitorsHow Does It Work?

The Government offers mortgage lenders the chance to purchase a financial guarantee, backed by the Government, which would pay the lender the deposit shortfall if the purchaser defaulted on the mortgage.

This gives lenders the confidence to lend more than 75% of the purchase price and means that first time buyers can now buy a property with a deposit of as little as 5% of the purchase price.

You are eligible for Help to Buy 2 if:

 The property is in the UK
 You intend to live in the property as your only home
 You have a minimum 5% deposit
 You will be subject to the usual lender credit and income tests
 You do not own any other property anywhere in the world
 The mortgage must be on a repayment basis, interest only loans do not qualify
 It is a purchase – re mortgages do not qualify
 The property is not shared ownership or shared equity

What else do I need to know?

 Unlike Help to Buy 1 the property you wish to purchase can be either a new-build property or an existing property
 Offset or guarantor mortgages are not included in the scheme
 You may not let the property out to anyone else
 Your deposit cannot come from a Government scheme – meaning you could not use the new Government Help to Buy ISA in conjunction with Help to Buy 2
 The maximum purchase price is £600,000
 The mortgage repayments must be less than 4.5 x your income
 The scheme is due to expire in December 2016
 The scheme does not guarantee your monthly repayments if you fall ill or out of work – it is designed only to protect the lender
 Most of the UK banks offer the scheme including Al Rayan Bank, Barclays, Halifax, HSBC, Lloyds, NatWest, Post Office, RBS and Santander

How do I get a Help To Buy 2 Mortgage?

 Contact lenders direct and ask about Help to Buy 2 mortgage deals – remember to shop around
 Check out the internet mortgage comparison sites for best rates
 Ask a qualified mortgage broker to shop the whole of the market for you
 Once you have found a suitable mortgage all you need to do is to choose the property you want to buy – remember it must be less than £600,000