Help to Buy Scheme questions

nealbo

I've been looking into this and I'm a little confused on the setup. My situation at the moment is that I'm looking at a £100k house

Now looking into the help to buy scheme, it states that they will loan 20% of the price of the house, so that takes me down to £80k. Now this is where I'm a bit confused, it states you supply a 5% deposit, which would take me down to £75k although I'd like to pay a 10% deposit, which would bring me down to £70k - is that possible or must it be 5%?

Also, does the inclusion of the 20% loan reduce the amount that a bank would be willing to offer?

kingstreet

If you want to buy for £100k, you can apply for a 20% equity loan, £20,000. You can put down a minimum 5% deposit, if you want to put down 10%, that's fine. You should obtain a moretgage agreement in principle before reserving.

That would mean you have the following breakdown;-

£20,000 equity loan
£10,000 deposit
£70,000 mortgage

£100,000 purchase price.

When you reserve the property, you complete a Property Information Form and the two are emailed to the local HCA Homebuy Agent for approval. When they issue your Authority letter, this will confirm the amount of equity loan granted. This can be 20%, 10% or nil, if the Agent feels you do not need support and could buy alone. Once you have your Authority to proceed, you can then instruct solicitors and apply for a mortgage.