Help To Buy
A great little scheme by the government to help both First time buyers with little or no deposit purchase a property or even people with a home who need to purchase a larger property due to additions their family and need more space. Given the prices of property in todays market this is a God send.
This Help To Buy scheme is for new build properties only. Properties which are on the open market will not be eligible of this scheme. The reason for this is because larger developers i.e. Barratts or Crest Nicholson have to offer a certain percentage of their new development as “Affordable Housing” under the Help to Buy scheme. In this instance the developer will put a 20% deposit in, you will put 5% of the property value in. You then apply for a mortgage for the rest of the 75% of the property value.
In my opinion this is a great scheme because you can get a mortgage of 75% of the property value.
The other benefit you have is because the loan in comparison to the property value, (Loan To Value) is low, then your interest rate is reflected in that.
Please be wary that NOT ALL mortgage lenders offer Help to Buy mortgages so yet again Get in Touch and speak to someone who knows
Help To Buy Q&As
When your property is sold in the future, if improvements have been made with the approval of the Post Sales Help to Buy Agent, these will be ignored when your property is valued to work out how much should be repaid to the Agency.
The property purchased must be your only residence. Help to Buy is not available to assist buy-to-let investors or those who will own any property other than their Help to Buy property after completing their purchase.
You cannot rent out your existing home and buy a second home through Help to Buy.
Applicants who make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution. Fraudulent claims will always require immediate repayment of the equity loan.
SDLT is payable at the time of purchase, on the full purchase price of the home. That is, the amount paid by you (the first mortgage and any cash contribution) plus the value of the Help to Buy loan.
There is no further SDLT to pay on any ‘staircasing’ repayments or repayment when the home is sold.
You should budget for SDLT on the full open market price of the property when you purchase a Help to Buy home.
Your solicitor and mortgage adviser can advise you how much the stamp Duty will be when before you purchase your new property, so you may budget for this.
Your moving in date may depend on the time required to complete construction work – this will vary from scheme to scheme. Some Help to Buy applicants may need to wait for a longer period for a home that matches very specific needs whereas others may buy from a development that allows you to move in earlier.
Advances to be used for repaying the equity loans in part (staircasing) or full will usually be welcomed and approved. Advances for other purposes will be considered by the Post Sales Help to Buy Agent on a case by case basis (see question below regarding extending or altering the property).
You may be able to transfer your mortgage to another lender taking part in the scheme following scheme following prior permission from the Post Sales Help to Buy Agent. However, you must ensure your new lender is informed that your home is a Help to Buy property with a second charge entitling the Homes and Communities Agency to a share of the future sale proceeds. You should note that not all lenders will accept a remortgage where there is already an equity loan in place.
The Post Sales Help to Buy Agent may decline permission for further advances or transfer to another lender if after assessment they consider you may be putting yourself in an unsustainable financial position.
The Post Sales Help to Buy Agent will collect your fee by direct debit or standing order. They will contact you at least one month before your fees are due, to set up your repayment arrangement. If you do not pay by Direct Debit, you will pay an additional administration charge which is currently £4 per month.
You will also receive a statement each year confirming when your fees are payable. The annual statement will also show any payments you have made once you start paying the fee.
If you bought the house/flat on your own and you die, the home will be passed on in the normal way under the terms of your will and the payments explained in the Help to Buy guide will be made by your estate in accordance with the scheme. If you have not made a will it will pass under the laws of intestacy.
We recommend a sole buyer seeks independent legal advice about this.
If you bought your home with others and one of them dies, their interest in the property will either be transferred to the surviving co-owner (s) or will pass under the terms of their will, or (if there is no will) the laws of intestacy. The easiest way to ensure it is passed to the other owner is to put in place a life assurance policy. For more information about life insurance please either speak with your adviser or check out our insurances section on our website www.mortgagesavingexperts.com. We can arrange this for you and your adviser will advise you on this during the process of you purchasing your Help to Buy home
It is recommended that where there are two or more owners, they seek independent legal advice about this.