Help to Buy, is a First Time Buyers initiative developed by the government. Simply put, it means you can get onto the property ladder with a bit of assistance by way of a loan from the government, which you would put toward the cost of buying a brand new, newly built home.
You’d need to make sure your home is built by a credible and reputable home builder who is registered for the scheme.
To purchase a new home via this method, you would need a 5% deposit of your own. In addition to the borrowings from the government, called an equity loan, will dictate how much you need a mortgage for, which of course, West Yorkshire Money would be delighted to assist you with.
The scheme is open now, and runs until 21st March 2023, so talk to us here at West Yorkshire Money, and one of our qualified advisors can help you through the process.
How do I qualify for Help to buy?
To qualify for the government’s Help to Buy initiative, you must be in the UK, have a purchase price of up to £437,600 (excluding London), be the only home you will own, be where you intend on living and be purchased with a mortgage.
How does the equity loan work?
For example, if your new home is worth £200,000, you’d need a 5% deposit of £10,000. Plus, your 20% equity loan of £40,000 from the government, alongside your 75% mortgage of £150,000 = £200,000.
The money you borrow from the government is interest-free for five years and must be repaid after 25 years. After the initial interest-free period, the interest rates on your loan will go up each year in April, in line with the Consumer Price Index.
We understand that this can be quite daunting and perhaps a little confusing, so any questions or queries, just ask. We can explain how everything is arranged and how and when the equity loan is paid back.
Is there a limit on the property value?
Yes, and this is dictated by the region you live in. Here in Yorkshire, it’s £228,100. But if you were to live in London, for example, then it’s £600,000.
What happens if I want to sell my home?
If you come to a point whereby you want to sell your first home, or you have paid your mortgage off, then you must repay the equity loan along with any share of the increase in value of your property.
For example, if you bought your home for £200,000 and sold it for £250,000, this equates to an increase in value of 25%. Therefore, your equity loan repayment would now be £50,000, as the original borrowing of £40,000 plus the 25% increase in value is an additional £10,000 = £50,000.
At West Yorkshire Money, we’re perfectly placed to assist with your Help to Buy requirements, having lots of experience in this particular area. From explaining how everything works to arranging your mortgage for you.
Complete the enquiry form or give us a call, and one of our experienced Advisors will be straight back to you, and you can be on your way to getting your foot on the ladder!