Wednesday, 17 August 2022

Find out more about Help to Buy scheme

06/08/2018

OVER a period of four years, a Help to Buy equity loan has assisted with the purchase of almost 280,000 homes in England.

But many people still don’t fully understand what help to buy is and who is eligible to apply for it.

Developer Bewley Homes is hosting a Help to Buy workshop at Jubilee Meadows, Hersham, Surrey, on August 11.

Claire Gibbins, head of sales at Bewley Homes, said: “Much of our core market is driven by Help to Buy and at some of our developments as many as 90 per cent of the sales have utilised this government scheme.

“However, much of the criteria surrounding help to buy remains essentially misunderstood. We are hoping that, by making financial and legal experts available at our designated workshop, prospective purchasers can learn all they need to about help to buy.”

What you need to know about the Help to Buy equity loan:

• It is available to all purchasers — not just first-time buyers

• It is only available on new-build homes costing up to £600,000

• Not all mortgage companies do help to buy mortgages

• You cannot own any other property – anywhere

• You won’t be able to sublet this home

• You won’t be able to enter into a part-exchange on your old home

Help to buy is an equity loan scheme in which the Government will lend up to 20 per cent of the cost of a new-build home, so buyers only need to provide five per cent of the purchase price as a cash deposit, with the remaining 75 per cent being made up by a mortgage. The Government won’t charge loan fees on the 20 per cent loan for the first five years of owning your home.

So, to put that into perspective, if your new-build house costs £200,000, the government loan will cover £40,000 (20 per cent); you would provide £10,000 (five per cent) as a cash deposit and a commercial lender will cover the cost of the additional 75 per cent (£150,000).

If you sell your home and it has increased in value, say it sells for £210,000, you’d get 80 per cent, the combination of the 75 per cent mortgage and the five per cent deposit, back and you’d have to pay back the mortgage from this sum and pay the Government back £42,000 to cover the 20 per cent loan.

If you are considering Help to Buy, get advice from a mortgage company, a solicitor or Help to Buy South on 0800 4561188 or visit helptobuysouth.co.uk

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