Why choose the Help to Buy Equity Loan?

April 2018
Why choose Help to Buy?

Lets start by telling you about the Help to Buy scheme; how it works, what you need to be eligible and the process. 

The Help to Buy Equity Loan is a scheme designed to help to you buy a new build home
up to the value of £600,000. An equity loan between 10-20% is available to make your purchase more affordable, and you will only need a 5% deposit.
The myth that surrounds the Help to Buy scheme is that it is only for first time buyers and it is safe to say that this is definitely not the case. The scheme is for any buyer who is looking to purchase a new build home. 
Whether you’re looking to get on to the property ladder or move up it, we’re here to provide you with the assistance you need. Obviously, there are certain criteria you must meet in order to qualify for Help to Buy.

For us to be able to help you, you must be able to: 

•    Fund up to 75% of your chosen property through a conventional mortgage- you must take out a minimum of 25% as a mortgage 

•    You must not be borrowing more than 4.5x your gross household income (minus any debts) 

•    Your monthly repayments (mortgage, equity loan interest and any services charges) must not be more than 45% of your monthly net household income (minus any debts) 

•    Have no other residence or properties in your name or have any properties in your name once completion takes place on your Help to Buy property.

•    Not rent out your existing home and buy a second home through Help to Buy 

•    Have access to a minimum 5% deposit

We will then carry out an assessment of your application to make sure that you are in a position to afford a mortgage for your proposed purchase. 

Our customers say Help To Buy is just what they needed to help them step onto the property ladder.  Rachel said:
"The process was so smooth and stress free. 6 weeks from putting our reservation fee down, we were living in a beautiful new home, which we could actually call our own. I'd 100% recommend it for anyone thinking about getting on the property ladder but thinks that they could never afford to!" 

So lets talk about why Help to Buy could be right for you…

1.    You only need a 5% deposit!

This is probably the most obvious pro to the scheme. Many buyers struggle to save a deposit for a new home. However, if you choose a property offering Help to Buy, you only need a 5% deposit saved up!
For example, if you were purchasing a £250,000 home you would need a £12,500 deposit as oppose to the usual 10% deposit of £25,000.

2.    The government lend you a 20% loan.

The Help to Buy Equity Loan is a scheme designed to help to you buy a new build home up to the value of £600,000. You pay a 5% deposit, the government give you a 20% loan and you are left with just a 75% mortgage.

3. The first 5 years are interest free!

Sounds too good to be true right? But it is true! The first 5 years of the loan are interest free and only in the 6th year onwards will you start paying the interest on the loan. The interest payments that you make will only be interest payments and they won’t be deducted from the total amount of the loan.

4.    Access to a cheaper mortgage rate.

Because you are borrowing just 75%, your chances of getting a lower mortgage rate are lower. The more you borrow, the higher the mortgage rate tends to be.

5.    Buy a new build home!

The Help to Buy scheme is only available with new build homes. You could move into a home that has never been lived in before, with just a 5% deposit. Developers such as Linden Homes, Barratt Homes and Strata provide homes with the Help to Buy scheme.

So if you’re looking for a home but don’t have a huge deposit, you could buy your new home sooner than you think. 
If you have any enquiries about the scheme, call our friendly team at Help to Buy NEYH on 0113 825 6888 or email at enquiries@helptobuyneyh.co.uk. You could also send an enquiry here.