Government help to buy scheme

givememoney

Hi


Can someone help with the following.


I understand the Government will let a buyer buy with a 5% deposit. Can you explain the following.


Say someone buys a place costing £100k and put down the 5% deposit of £5K.


1. What happens first? Do you go to building society that participates in the scheme.


2. Do you find property next?


3. How much would you have to pay per month on the money owed (at this time)


Any other info appreciated.

dgtazzman

Is this new build or second hand market?

If new build, you can talk to the builders, they will ask you to speak to their IFA to go over the numbers, if they add up, you can either choose to use their IFA or find your own and put in an application with your HTB agent. The ball will start rolling from there and the IFA will tell you what's next. Usually when the AIP for HTB is approved, the builders will continue with a formal reservation of the plot and the IFA will start looking at mortgages.

If it's a second hand property, it's probably going to be similar, only you'd have to appoint your own IFA, find a property and go through the process. I would imagine the HTB agent will need the property details in order to process the AIP.

Not quite sure what you mean with question 3.

givememoney

Yes sorry this isn't for me but for my son and I haven't moved for so many years I am not up on the procedures.


Re. question 3. Just wanted a rough idea on what his monthly repayments would be on £100k after the 5% deposit = £95k then this 20% the government put forward. Does this 20% come off the loan to make the repayments less???

Thrugelmir

The 20% is in fact an interest free loan for 5 years. After the initial 5 years then interest is charged.

The assessment for affordability will be based on borrowing the full £95k.

At 5% interest a £95k loan would cost £556 on a 25 year term on a repayment mortgage.

kingstreet

Help To Buy - Equity Loan

Newbuild only
Min 5% deposit plus 20% loan from HMG interest-free for five years
75% mortgage
Loan repaid from sale and based on property value then, not original amount.

Help To Buy - Mortgage Guarantee

Second hand property
5% deposit, 95% mortgage.
No loan from HMG
HMG gives lender a guarantee in event of repossession it will cover top 15% of loan.

You need to establish which scheme you are planning to use.

givememoney

Thank you all so much