Help To Buy Mortgages

“I’d completely given up on trying to find a lender and now I’ve been able to buy my first home.

Davie
– Worcestershire Home Owner

SN Financial offer specialist mortgage advice for first time buyers and those having difficulty in purchasing a home on the open market. This is provided through tailored ‘Help to Buy’ products available to clients in Worcestershire and the surrounding areas.

the team discussing help to buy mortgages
using a calculator to calculate help to buy equity loans

Equity Loans – Help to Buy

Help to Buy – Equity Loans are available to first time buyers as well as homeowners looking to move. 

The home you want to buy must be newly built with a price tag of up to £600,000. With a Help to Buy – Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

Key features of a ‘Help to Buy Equity Loan’

The scheme is available on new build homes in England up to the value of £600,000

No annual household income limit is applied

You will only need to secure up to a 75% mortgage with a commercial lender

You need to be able to afford and sustain the mortgage payments on your chosen property

Current homeowners can apply for an Equity Loan however they must sell their current home

For the first five years the loan is interest free, but from year six onwards you have to pay monthly fees which start at 1.75% and then increase every year by inflation +1%.

These fees do not count towards what you owe on the equity loan so it’s important to factor in this additional cost when weighing up whether shared equity is right for you

Shared Ownership

Help to Buy Shared Ownership presents a fantastic opportunity for those who want to get a foot on the property ladder but can’t afford to buy a home on the open market.

The scheme allows you to buy a share in a brand-new leasehold property (either a house or an apartment) on a part buy/part rent basis. A mortgage payment will be made on the percentage of the home you do own, and a subsidised rental fee is paid on the percentage that you do not own.

Help to Buy Shared Ownership is great if you have limited savings, as you only need a deposit for the share you’re buying and if you buy a small share, you’ll only have a small mortgage.

graph showing help to buy shared ownership figures

To qualify for Help to Buy Shared Ownership, you must meet the following criteria:

You can’t afford to buy a home on the open market

You have a household income of less than £80,000 per year

You are a first-time buyer

You are at least 18 years of age

You buy a share of between 25% and 75% in a new home then pay a subsidised rent, usually to a Housing Association, for the remaining share

The share you buy is worked out by the Registered Provider (usually a Housing Association) according to what you can afford. The bigger the share you buy, the less rent you have to pay

You will need to be able to raise a mortgage for the share you want to purchase unless you have sufficient savings to buy your share outright

Please note that although it is usually new properties that are available to buy under Shared Ownership, properties that were originally sold under Shared Ownership become available for resale. There will also be other costs to consider when you are purchasing a home which may include mortgage fees, valuation fees, solicitor fees, Stamp Duty Land Tax and moving costs.

Need help or advice?