Our advisers have extensive experience in dealing with the Help to Buy Equity Loan scheme. It involves a separate affordability calculation in addition to the one carried out by the lender and a separate application, both of which will be processed by your adviser. Please contact us if you have any questions.
Help to Buy Equity Loans are available on new build homes in England with a purchase price of up to £600,000. They are available to all home buyers including first time buyers and people moving house, subject to eligibility criteria. You will have to put down a deposit of at least 5% of the property price (although it can be as much as 55%) and the Government will give you a loan for a minimum of 10% and up to 20% of the purchase price. You will need to pay this loan back to the Government after 25 years, or earlier if you sell the property. You will also need to arrange a mortgage of up to 75% to cover the rest of the cost of the property.
The details are slightly different for London where the maximum Government loan is up to 40%.
An important point to know about Help to Buy is that because the Government has given you a loan to help you buy your new home, if you sell the property, some of the profit on the sale is paid back to the Government. How much you pay back to the Government is based upon the market value of your home when it is sold. So if you had a Help to Buy loan of 20% of the purchase price, you pay the Government back 20% of the sale price.
There is a separate affordability calculation that needs to be done to ensure you qualify, but one of our experts can help you through that in addition to completing the paperwork required by the Help to Buy Scheme once you proceed.
You also have some extra payments to the Government relating to the equity loan deal. You must pay £1 per month from the date you move in and after five years, you start to pay interest on the Government loan. Please see the link below for all the details on the how the scheme works.
For more details about Help to Buy visit www.helptobuy.gov.uk/equity-loans/
The new home you are buying must be your only residence and Help to Buy is not available to people looking for a Buy to Let mortgage.