Help to Buy Equity Loan
With the recent changes in stamp duty, and lots of competitive mortgage offers available, there’s never been a better time to buy. And Help to Buy makes it even easier. The Government-backed equity loan scheme means you could move into a new home in England, Wales or Scotland with just a 5% deposit.
Help to Buy - England and Wales
Help to Buy makes it less risky for lenders to offer a mortgage to a borrower with only a 5% deposit. Which means you should get a much more favourable interest rate than previously available with a small deposit.
A mortgage under the Help to Buy scheme works like any other mortgage. Your lender will check that you can afford it and that you do not have a history of payment difficulties.
Here’s the criteria you’ll need to meet to qualify for a mortgage under the scheme.
- The property must be a new-build. All Keepmoat homes in England up to £600,000 qualify for Help to Buy
- You can’t own any other property anywhere in the world while you’re under the scheme
- Your mortgage must be a repayment one. Interest only, offset and guarantor mortgages are excluded from the scheme
- You can’t let out the property to somebody else – it must be the home you plan to live in. Help to Buy is not for investors
- Your mortgage can be taken out by an individual or individuals but not by a company
- You can’t use Help to Buy with any other Government scheme. But it can be used in conjunction with other Keepmoat offers
- The mortgage used to pay for the remaining 75% must be less than 4.5 times your income
Help to Buy - Scotland
Help to Buy in Scotland is back! Using the popular Government-backed equity loan scheme, you could move into a brand new Keepmoat home with just a 5% deposit.
This scheme is perfect for first time buyers looking to get on the property ladder.
Here’s how it works:
- You provide 5% deposit for your new home
- You receive an equity loan from the Scottish Government for up to 15% of the property value
- You secure up to an 80% mortgage from a bank or building society
The maximum price of properties included in the scheme will reduce each year as follows:
- 1st March 2016 - 31st March 2017 the maximum property value is £230,000
- 1st April 2017 - 31st March 2018 the maximum property value is £200,000
- 1st April 2018 - 31st March 2019 the maximum property value is £175,000
What happens if I sell my Help to Buy home?
The Help to Buy equity loan must be paid in full when you sell your home. And if you received a loan for 20% of the value when you bought the home, you’ll have to pay back 20% of the value when you sell. So if your home has increased in value, you’ll have to pay back a little more than you borrowed.
An independent valuer will decide what your home is worth and your home needs to be sold on the open market.
If you’ve already paid back your equity loan, there’s nothing else to pay back to the scheme.