October 7th, 2016
Help to Buy has been in the news a lot in recent weeks, and it appears that whilst much has been spoken about it, many home buyers are still unsure about what is and isn’t happening with it.
The first thing to understand, is that unlike what many people are saying on social media and in the public, Help to Buy is not stopping. Having helped over 185,000* home owners in the UK, the Help to Buy schemes have benefited many people, and this is set to continue.
What’s interesting in this statement is the term schemes and not scheme. Help to Buy is an umbrella term which actually covers SEVEN schemes: Equity Loan, Mortgage Guarantee, Isa, London, Wales, Scotland and Shared Ownership. What you will have seen in the news is that the Help to Buy Mortgage Guarantee is ending this year, and none of the others.
This change will mean that purchasers looking to buy a new build home from Seddon won’t be able to use this scheme, however the Help to Buy equity loan is still very much available until 2020. Therefore, any of our new homes can still be purchased using the Equity loan.
The Help to Buy equity loan requires a minimum 5% deposit of the house asking price initially. The Government will then lend the buyer a further 20% in the form of an equity loan, resulting in only needing a 75% mortgage from the bank, as opposed to the 95% mortgage that the Mortgage Guarantee scheme would have required.
A lower mortgage from the bank, means a lower mortgage rate and less interest to pay back. You then have 5 years interest free to pay off the equity loan from the Government which is a huge help to any home owner!
“Can I use Help to Buy when buying off plan?”
Help to Buy is available on all of our plots, whether built or still awaiting construction. Having helped to secure over 91,000* new home completions, the Help to Buy equity loan is a fantastic scheme to help secure your brand new home.
81% of users of the Help to Buy equity loan are first time buyers according to Which? demonstrating that in the current economic climate, it is a valuable tool to use when purchasing your new home!
We hope that this has managed to clear up exactly what is happening with the Help to Buy schemes, and also how they can help you when buying your new Seddon home. For more information contact your local Sales Advisor who can assist in starting you on your customer journey with us.
*Figures correct at time of publishing, as stated by Which.co.uk