Mortgage Guarantee Scheme / First Time Buyer Options

aldredd

Hi there, after years of renting, my family and I are inlooking to be in a position whereby we should be able to buy our own place soon– and we’re very excited. We’re targeting H1 of 2014, but trying to get theremaining cogs in place.

We’d been eyeing up the new home equity loan scheme, but Ihave to say – I’m not all that keen on it, especially as smaller 3 bed new-buildhouses seem to have rocketed in price in the last few months, costing some 50%more than an existing property of a similar spec.

We do have a 5% deposit available, but we can probably getthat up to 10% within 6 months or so, so was thinking we should target aconventional mortgage with a higher LTV value, but most mortgages with high LTV’slook to be for existing home owners rather than first time buyers. (I’vechecked the repayments on a 90% mortgage, and we should be able to afford themcomfortably)

Looking on gov.uk, it does appear that they’re launchinganother scheme which guarantees mortgages up to 95%. But I haven’t been able tofind any details on it yet – has anything else been announced on this scheme?

My hope is that this will open up the number of mortgageproducts with a 90% LTV to first time buyers on existing builds.

Is anyone aware of any other scheme / providers out thereworth looking at? We’re in a pretty good financial position, but has taken ussome time to save the (close to) 10% we have – and hope I don’t have to waitmany more years whilst we save away to get to the magic 25% (especially as welive in the south east – that’s an awful lot of cash!)

Also, is it advisable to see some sort of financial advisorbefore starting the process? Just someone to sit down talk through ourfinances, credit files etc in case there is something I’ve overlooked? Howwould I find a decent one, and what sort of cost would I be looking at?

Thanks for any suggestions!

kingstreet

HTB - Equity Loan on newbuilds is different to HTB - Mortgage Guarantee which starts in January. The current scheme gives a loan from the Govt to help with deposit which is interest-free for five years. The loan is linked to the property value, so if you get 20% at the outset, when you pay it back on sale, you pay 20% of the sale value.

HTB-MG will enable lenders to offer more 90%+ mortgages as the Govt will give lenders a guarantee on the top 15% and relax the capital requirements for higher LTV mortgages. There will be no equity loan on the new scheme. Check out NewBuy now and imagine that extended to old property.

I would suggest speaking to an experienced whole market broker for a thorough overview before you start to view. Obtaining all three versions of your credit file can't do any harm either.