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The What, Where, When and How of the Help to Buy Scheme

30 Sep 2013
The What, Where, When and How of the Help to Buy Scheme
 
The second phase of the Help to Buy Scheme is aimed at helping people get onto the property ladder
David Cameron announced on Saturday night that he is bringing forward the second phase of the Help to Buy scheme to help people get onto the property ladder. It is widely expected that this scheme will cause a high demand, so how do you beat the crowds?  Here we give you the basic run-down of the scheme and how we can help.

What?

A scheme to help thousands of people buy their own home will be launched next week. Under the new mortgage guarantee scheme, the buyer would only need a 5 per cent deposit on mortgages up to a maximum value of £600,000 for new or existing homes.

Where?

Several lenders will be offering the new Help to Buy mortgages, ranging from 80 to 95 per cent of the property’s value. The government and the lender then jointly guarantees up to the next 15 per cent of the property’s value, in return for a fee paid for by the lender.

When?

The scheme was due to start in January 2014 but the government has announced that people will be able to start applying for the new mortgage guarantee from next week. To be able to offer the guarantees ahead of schedule, the government will be allowing lenders to start writing loans that will become part of the scheme once it opens in January.

How?

There are several lenders who have signed up for the scheme.  You can ask an independent mortgage broker for advice on the best lender to suit your needs and if you qualify.

Here are 4 things you need to know about whether you can take advantage of this scheme:

  1. Only repayment mortgages will be offered under the scheme.
  2. There will be tough checks to make sure buyers can afford their mortgage payments and the borrower’s income will be verified.
  3. The scheme will not include interest-only or self-certified mortgages.
  4. The new mortgages will not be available to people with a history of difficulties making debt repayments.
 
 
Watch this space for more information about the Help to Buy Scheme as more information is released or follow us on Twitter @Northfieldslive or Like us on Facebook to keep track of updates.

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