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What is the Help to Buy Scheme and how does it work?

First Time Buyer, Help To Buy, Homebuyer, Mortgages, Remortgage
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What is the Help to Buy Scheme and how does it work?

The Help to Buy scheme helps homebuyers and First Time Buyers who don’t have a lot of savings to buy a home.

The Help to Buy scheme is available to those who have a 5% deposit to put towards the purchase of a property.

Help To Buy Mortgage

How does the Help to Buy scheme work?

As with any mortgage application you need a good credit rating and to buy a home through the Help to Buy scheme you will need to have a 5% deposit.

Once you have found a suitable property you will then need to find a suitable Help to Buy mortgage from a willing Lender.  The Lender then applies to the government for a guarantee on your loan of up to 20% of the value of your property, which means if you default on your mortgage and the property is repossessed the Lender will be liable for this portion of the loan.

Who are Help to Buy schemes available to?

Help to Buy mortgage schemes are available to first time buyers, homeowners moving home and potentially those who need to remortgage.

Unlike other schemes the Help to Buy scheme will accept both new builds and second hand properties.  The property must be valued less than £600,000 (£400,000 in Scotland). Second homes and Buy to Lets are excluded from the scheme.

How do I apply for a Help to Buy mortgage?

A good Mortgage Adviser will help you source a suitable mortgage from a lender that operates in the Help to Buy scheme.

Remember there will be additional costs above and beyond the required 5% deposit, such as

  • Mortgage application & booking fees
  • Survey costs
  • Solicitor’s fees
  • Mortgage Advice fees
  • Buildings and contents insurance and life assurance

Of course the lender will have to carry out the usual checks on prospective borrowers such as assessing their credit report, assessing affordability including the ability to cover repayments if the interest rate increases.

Images courtesy of kennymatic on Flickr

THIS PAGE DOES NOT CONSTITUTE ADVICE AND SHOULD NOT BE TAKEN AS A RECOMMENDATION TO PURCHASE OR INVEST IN ANY OF THE PRODUCTS/SERVICES MENTIONED 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

About Ciaran Scullion

I am a Financial Planner and Mortgage Adviser. I provide Independent Financial Advice through my company From Acorns Financial Planning Ltd to personal and business clients throughout Northern Ireland from my base in Tyrone, Mid Ulster.

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