Help to Buy
WHAT IS HELP TO BUY?
Help to buy is equity loan assistance to buyers of new homes from the Government’s Home and Communities Agency (HCA).
HOW DOES IT WORK?
Buyers will be provided with an equity loan of up to 20% of the purchase price of the property which will be interest free for 5 years – you will need to put down a minimum deposit of 5% from your own savings and meet the requirements of an authorised lending institution (Bank/Building Society) for the remaining 75%.
WHAT HAPPENS AFTER 5 YEARS?
A fee of 1.75% per annum will be charged on the equity loan. From the fifth anniversary of the loan this fee will increase each year by the increase (if any) on the retail price index plus 1%.
WHEN DO I HAVE TO PAY BACK THE LOAN?
You must repay the loan at any time within 25 years – or earlier if the terms of the first mortgage are shorter than this – or when the property is sold. Part repayments are allowed at any time but must be a minimum of 10% of your home’s market value at the time of the repayment.
WHAT HAPPENS IF I WANT TO SELL MY HOME?
When you sell your home you will repay the equity loan simultaneously. So if you initially purchased with a 20% equity loan from the HCA and have made no repayments you will repay the HCA 20% of the value of the property at the time that you sell.
WHAT IF THE VALUE OF MY PROPERTY HAS FALLEN?
As above, but you must always show that the proposed sale value is at the prevailing market value before going ahead with the sale, as long as you have complied with all your obligations in the Help to Buy mortgage deed you will not be required to provide for any of the shortfall in the equity loan if you sell when values have fallen.
HOW DO I KNOW IF I QUALIFY FOR THE SCHEME?
If you can raise 5% of the purchase price and meet the requirements of the local Home Buy Agency following an assessment – you will qualify for the scheme.
I AM NOT A FIRST TIME BUYER – DO I STILL QUALIFY?
Yes! Help to Buy is available to both first time buyers and existing home owners.
ARE THERE ANY RESTRICTIONS TO THE PROPERTY THAT I CAN PURCHASE?
All Help to Buy homes are on new build developments where the HCA has an agreement with the house builder. You can only purchase from these house builders. The maximum purchase price is £600,000.
IS HELP TO BUY AVAILABLE ON A BUY TO LET?
No. The scheme is designed to assist you to move on or up the housing ladder. It is available only to owner occupiers.
I THINK I MIGHT QUALIFY – WHAT DO I DO NOW?
If you would like to further your interest in the scheme please contact our sales department on 0113 237 5900 and we will be pleased to discuss the options open to you.
Terms and conditions apply – written details are available on request and from the HCA website: –