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New government scheme for first time buyers
humey86
Posts: 43 Forumite
We have started to save for a deposit for our first house and were wondering about the new scheme introduced by the government for first time buyers. As i understand it the scheme currently stands only for new build properties and will include existing properties in 2014. I have no knowledge of mortgages and how they work so please bare with me! The average house price in the area we would like to buy is around £180,000 (currently)
Can anyone explain how this new scheme works to a total novice? Thanks
Can anyone explain how this new scheme works to a total novice? Thanks
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Comments
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Help To Buy is not only for first time buyers is is for all homebuyers who will own only one home from completion.
The current scheme involves an equity loan on a newbuild property and the new scheme will increase the supply of higher percentage mortgages (90% to 95%) by the introduction of a Government guarantee.
See the current "NewBuy" scheme for comparison and imagine it extended to second hand homes too.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
This is all very confusing for everyone.
The bottom line is.
Help to Buy current works for new build only.
In 2014 the same type of arrangement WILL NOT be offered on existing (pre-owned) properties.
The 2014 Help to Buy additional scheme is support for lenders to encourage them to offer more and better priced mortgage products for smaller deposit buyers.
As a buyer this means you may find it easier and more affordable than currently to get a mortgage with a 5% deposit on an existing property (you borrow 95%).
It does not mean the Government will take a 20% equity share and you then borrow the remaining 75% as on the existing (2013) help to buy scheme.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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