Advice for First Time Buyer

soozh

Hello,


I am a first time buyer looking for some advice.


I have approximately £25k saved up for a deposit, but I am wondering if it will be more beneficial to do the help to buy 5% deposit scheme and continue to save my deposit, or to combine the 5% deposit and savings to pay off a mortgage quicker, or to not do the scheme and just use the deposit.


I realise that this is not a straight forward question, but if anyone could point me in the direction of where I could get some helpful advice that would be very useful. I have been in touch with numerous financial advisors who have been unwilling to help.


Thank you!

kingstreet

HTB - Mortgage Guarantee only helps those with less than 10% deposit.

If your savings will be more than 10%, a "normal" mortgage will get you a better rate.

If you are buying a newbuild, Help To Buy - Equity Loan may help you reduce your borrowings now, but at the expense of repaying a loan based on the future value of your property later.

5% is the minimum level of deposit, not the maximum or only level.

TCPPC

I thought about the HTB scheme which look so tempting but the problem i found was with this scheme the developer are putting the price up on upcoming plot and were less willing to offer other incentives i.e discount off. Whilst if I go straight mortgage they offer me 5% off the purchase price.

HTB is technically defer the loan to 5 years later unless you are confident in building a large reserve to make over-payment then its pretty

(Dont know what your purchase price) If Purchase Price is 160K, you said you got 25K deposit that LTV 15% so you can already get decent deal out there. Depends if you want to go fixed/ tracker etc

Example:
25000 15.1%
32,000.00 20.0%
103,000.00 64.375%
160,000.00


8,000.00 5%
32,000.00 20%
120,000.00 75%
160,000.00

just say you got fixed 5 year by paying 25k deposit, fixed for 5 year at 4.5%

After 5 year 90494 (without overpayment)
Plus defer loan 32000 (subject to property dont go up or down)
122494

thats 573 per month with your deposit i should you are on quite high income, can you make overpayment 200+?
This was similar to mind I had 19K deposit, property for £150k, I decide against this scheme due to the inflated price + ground rent with a lot of these schemes. Plus I didnt want to overstretch myself right at the beginning.