Our Ultimate Guide to Help to Buy
Considering the Help to Buy scheme? Here’s everything you need to know
The Help to Buy scheme has been a popular option among first time buyers for more than 6 years now, having been introduced in order to help budding homeowners gain access to properties that would otherwise have fallen outside their price bracket.
The government scheme gives new buyers the chance to secure a property with just a 5% deposit. It’s one of the most popular offers we provide here at Homes by Esh, as the Help to Buy scheme is available on all our properties.
But if you’re considering the Help to Buy Equity Loan, it’s important to do your research beforehand. That’s why we’ve put together this handy guide to help you get to grips with all the Help to Buy scheme has to offer.
How does Help to Buy work?
Through the Help to Buy Equity Loan, the Government lends you up to 20% of the cost of your new house. This means you only need a 75% mortgage and a 5% deposit to make up the rest of the cost.
What’s more, you won’t be charged loan fees on the 20% loan for the first five years of owning your home.
Let’s take a £200,000 house as an example. In this instance, you’d only need a £10,000 deposit (5%). You’d also need a £150,000 mortgage (75%). But you’d receive £40,000 as a Government loan (20%). After five years, you’d start to pay back this loan, and you’d need to pay off your mortgage with your share of the money too.
In London, to reflect the higher property prices, the Government has increased the upper limit of their equity loan for new homebuyers from 20% to 40%.
The Help to Buy scheme is set to run until April 2021, at which point a new Help to Buy scheme will take effect.
Are you eligible?
Although the Help to Buy Equity Loan is most commonly used by first time buyers, it can also be used by current homeowners looking to move. The home you wish to buy must be newly built and hold a price tag of up to £600,000.
This makes the Help to Buy scheme an accessible option for most buyers. Though it’s important to remember that the loan cannot be combined with other offers such as subletting your new home or part exchanging your old property.
The scheme is also only available in England currently. However, the Scottish Government, Welsh Government and Northern Island Housing Executive all run similar schemes.
How do you apply?
It’s easy to make use of the Help to Buy scheme if you think it’s something you could benefit from. The equity loan scheme is run by Government-appointed Help to Buy agents who provide general information and guide you through your purchase.
However, you can also simply speak to the developer of your new build property. If they offer Help to Buy as part of their services, they can help you organise the loan and direct you through the process. This is something we can do for you here at Homes by Esh, as the Help to Buy Equity Loan is available on all our properties throughout all developments.
Looking for your dream home in the North East? Homes by Esh offers a range of stunning property developments located in and around Darlington, including Heighington Meadows, Woodburn Gardens and Lancaster Park. Get familiar with our homes today and get in touch for more information about the offers available.