Help to Buy was launched by the government as a way of helping buyers afford their next home. A common misconception is that you must be a first time buyer to use help to buy. At present this is not the case, but we would refer you to www.helptobuy.gov.uk for up to date criteria as it can change without warning.
At Wyke Financial our experienced specialists have been heavily involved with all Help to Buy formats and below we will set out an overview of the different options available:
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Help to Buy: Equity loan
Probably the most well known of the schemes but also the most misinformed. With the Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home (although a £1 per month fee applies).
You must be a UK tax payer and must only own the newly purchased property on completion.
All applications are subject to strict affordability criteria and a separate application to help to buy.
At Wyke Financial we have a vast wealth of experience in this market and unlike other firms will help you through this process and assist with your application forms. We do not charge for this service as it is included as part of our standard terms of business.
London Help to Buy
To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.
Help to Buy: Mortgage Guarantee
The Help to Buy: mortgage guarantee scheme has now closed to new loans as of 31st December 2016 as planned. Instead however a wide range of 95% loan-to-value mortgage products are available in the open market place. Our Mortgage Specialist are on hand to guide you through this.
Help to Buy: ISA
Purely a savings scheme with a top up from the government. From a mortgage perspective most lenders will have no issue in you using this scheme although we would advise to check when being used in conjunction with other schemes. The funds will be handled by your solicitor you will just need to advise us of any funds that will come from the help to buy ISA so we can advise the lender accordingly.
As a mortgage intermediary we cannot advise you directly on taking an ISA as it is a savings and banking scheme. You would need to approach a bank or building society regards opening an account and may require independent tax advice on taking out such an account.
If you are saving to buy your first home and save money into a Help to Buy: ISA the Government will boost your savings by 25% the maximum government bonus you can receive is £3,000.
Please visit : https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/ for more information on this scheme.
Moving or Re-Mortgaging
If you have a Help to Buy Equity loan or similar government or builder scheme you may find a few obstacles in your way when it comes to moving home or re-mortgaging.
The housing association will need to be informed of the outcome and you may find there is additional cost involved with this.
You may also be required to have an independent survey on your property and have additional solicitor work carried out.
It can be a time consuming and confusing process, especially if it is not something you have been familiar with before. Regrettably it is our experience of the industry that usually the client is left to handles this side themselves. This can often cause delay and increased costs.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
At Wyke Financial we have streamlined a process whereby you have the option to employ us to help you in the regard of a help to buy move or re-mortgage, we call this “Help to Buy Care”.
For more information on any of the above schemes (including advice on fees and paying back your loan) please visit www.helptobuy.gov.uk or arrange an appointment with one of our specialist brokers today.