Help To Buy

Having a low income and small deposit continues to be the main barrier stopping people from buying their first home. The Help to Buy government schemes aim to make home ownership more affordable for people without substantial savings.

Shared Equity

The Help to Buy Equity Loan is available on New build properties only. The maximum loan is 20% of the purchase price; you can add to this your deposit which must be a minimum of 5%.

If you’re buying a property in London, the government will lend you up to 40% of the property price.

The government equity loan is interest-free for the first five years. After this point there is an annual charge of 1.75% which rises every year by the rate of inflation, plus another 1%. The loan must be repaid either when you sell the property, or when you pay off the mortgage.

The maximum purchase price is £600,000. The loan can only be used to buy your main home and not a buy-to-let property.

These rules only apply to properties in England. Scotland, Wales and Northern Ireland run similar schemes. You can find out more about how these work here:

• Scotland: www.gov.scot/htb

• Wales: helptobuywales.co.uk

• Northern Ireland: www.nihe.gov.uk/index/advice/buying_a_home.htm

Shared Ownership

The Help to Buy Shared Ownership scheme enables you to buy a share of a property and pay rent on the remaining part. Shares are between 25% and 75% of the property value and you can buy further shares in the future when you are able to.

To qualify for Help to Buy Shared Ownership your household needs to earn less than £80,000 a year. This rises to £90,000 if you live in the capital. You don’t need to be a First Time Buyer.

Shared Ownership FAQ’s

Do you charge a fee?
We do not charge fees for our mortgage advice, and have never charged fees for Affordable Housing advice.

Why should I use you for my mortgage advice?
We are registered on the Help To Buy South West and Help To Buy South panels and have a specialist broker who deals only in affordable housing. We have excellent relationships with lenders and housing associations to allow for a speedy mortgage process.

Am I eligible for the scheme?
Before you can apply for a shared ownership mortgage you will need to apply to one of the government agencies, such as Help to Buy South or Help to Buy South West. They will assess you eligibility based on a few guidelines.

Your household should earn between £18,000 and £60,000 per year. If you have less income but substantial savings there may be other schemes that are more suitable for you.
You will also need at least £2,500 additional savings to cover legal costs and associated fees, and have a good credit history.
The minimum deposit required is 5% of the share price, however if you have a bigger deposit (15%+), you have a greater choice of mortgage lenders.
You must be a British of EU/EEA citizen, or have indefinite leave to remain in the UK.

I haven’t found a property yet, but can you tell me how much I can borrow on the Shared Ownership scheme?
The rent charged on the property plays a large role in your affordability and varies from property to property. We can have a look at roughly what you can borrow but to be more accurate you will need to have a property in mind first.

How long will it take to get an Agreement in Principle?
We receive a high volume of enquries but endeavor to have a response back to you within 24-48 hours from receipt of the necessary documents.

I have been offered a property, what do I do now?
Please get in contact and forward us a copy of the offer letter. We will also need you to gather copies of the documents required (you will be provided with a list), so that we can book an appointment to talk through your next steps.

My partner is unable to go on the mortgage due to bad credit or personal circumstances. Is this a problem?
You can still continue with your application, however you may need a larger deposit and be subject to the lenders criteria.

When do I pay the deposit?
You will need to pay the deposit to the solicitor shortly before you are due to exchange contracts. You may need to provide proof of the deposit during the mortgage application process.

Do I need a specialist solicitor?
Yes, you will need a solicitor who is experienced in shared ownership as there is additional legal work involved. We can recommend a solicitor for you if you need help finding one.

Can I use Benefit Income to boost my application?
Yes, however you need to put down a 10% deposit for the lenders to accept it. Your child tax credits need to be up to date and show the income you are on now. Any discrepancies will delay your application as you will need to get an amended award letter. Student loans and bursaries are not acceptable.

I am not working but have benefit income such as Child Tax Credits and Child Benefit, can I get a mortgage?
No, you will need to have a salaried income. The lenders will only accept benefit income up to the same amount as your salaried income. For example, if you are earning £5,000 they will only accept £5,000 worth of benefits.

If I easily pay £700 a month rent at the moment, does this mean I can get a mortgage?
Not necessarily. The lenders will assess you based on your income vs your outgoings. The rent that you will need to pay to the Housing Association is also included in these calculations. Just because you are paying a certain amount of rent at the moment does not mean the lenders will deem this as an affordable mortgage payment.

If you’d like to arrange a no-obligation meeting to discuss how we can help you please get in touch today, either by calling us on 01452 547783 or by using our contact form.