29 May 2019
Did you know that the popular Government-backed Help to Buy: Equity Loan scheme is available at both our Swing Bridge Wharf scheme in Moira and the fantastic Ancaster View? With Help to Buy you could be much closer to buying your new home than you think with just a 5% deposit needed to purchase a Wheatcroft home. In this article we explain how the scheme works and how it could make it easier for you to purchase your dream home.
What is Help to Buy?
The government-backed Help to Buy: Equity Loan scheme is designed to make buying a new home a little bit easier for both first-time buyers and current homeowners.
How It Works:
- You only need a 5% deposit
- The Government loans you up to 20% of the value of the property – a big boost to your deposit!
- The loan is interest free for five years making your new home more affordable
- You only need to secure a 75% repayment mortgage
- It is available on new build properties in England up to £600,000
- There is no household annual income limit and it is available to first time buyers and those already on the property ladder
- You can repay your Help to Buy: Equity Loan at any time, when you sell your home, or you can wait until the end of the term
Example for a home with a £200,000 price tag
Source: HM Government Help to Buy
There are some important conditions:
- The scheme is available exclusively on new build homes, like those available from Wheatcroft Homes, up to the property value of £600,000 in England
- The home you buy must be your only residence
- The scheme isn’t available to buy to let investors
- The scheme isn’t available to anyone who will own any other property after completion
Equity Loan:
In England, HM Government will provide you with a Help to Buy: Equity Loan up to 20% of the full purchase price of the property. This loan is interest free for the first five years. From year six you will be required to pay an interest fee of 1.75% of the amount of your Help to Buy: Equity Loan, rising each year after that by the increase in the Retail Price Index (if any) + 1%.
You can repay the equity loan at any time within the first 25 years (or the term of the mortgage) or when you sell the property. When you sell your home, you must repay the Help to Buy: Equity Loan from a share of the sale proceeds. So, if you received an equity loan of 20%, your repayment will be 20% of the total market value when it is sold.
You can also choose to make voluntary part repayments at any time, the minimum voluntary repayment is 10% of the market value at the time of repayment.
How to buy a Help to Buy home:
Stage 1 – Application
- Identify your Wheatcroft Homes Help to Buy property
- Speak to an Independent Financial Advisor (IFA)
- Ensure you have funds to pay
- A Reservation Fee (maximum £500)
- A deposit on exchange of contracts of at least 5% of the full purchase price
- Other fees on completion (stamp duty, legal fees, main mortgage fees)
- Complete a Help to Buy Property Information Form (available from Wheatcroft Homes)
- Reserve your new home and pay the reservation fee
- The Property Information Form and reservation form is sent to the Local Help to Buy Agent
Stage 2 – Authority to Proceed
- Checks are undertaken by the Local Help to Buy Agent
- If authorised, an “Authority to Proceed” form will be issued by the Local Help to Buy Agent
- You instruct a solicitor and speak to your IFA so a full mortgage application can be submitted
Stage 3 – Mortgage Offer and Exchange of Contracts
- Your solicitor will advise you and you will sign the sale contract and Help to Buy: Equity Loan
- The solicitor will undertake various checks and request permission to exchange contracts from the Local Help to Buy Agent
- Your Local Help to Buy Agent issues approval and contracts are exchanged
- You will have paid your deposit and are legally contracted to complete the purchase by an agreed date
Stage 4 – Completing the Purchase
- At completion, your lender provides funds and Help to Buy will make its funds available to you via the House Builder. Once completion takes place you will own the home and can move in
Help to Buy is available on several Wheatcroft Land properties. Contact us to find out more.