Help to Buy
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The Government’s Help to Buy scheme aims to provide help with mortgages to prospective borrowers for new build homes, and the area of first time buyer mortgages, providing they are valued at under £600,000.
Raising a sufficiently large deposit can be one of the hardest personal money challenges. Research in 2013 by Moneysupermarket.com indicates that the average age of a first time buyer in the UK has risen to 35. Many require the assistance of parents or other relatives in order to be able to purchase even at this age, making this a key family finance issue. In an effort to make it easier for young people to get on the ladder, the Government introduced its Help to Buy scheme in April 2013. The first stage applied to new-build properties only.
This first part of the scheme allows a prospective buyer with a deposit of only 5% of the property value to obtain a mortgage. Instead of the 95% mortgage such a customer would have to try and find previously, they can now apply for a mortgage for 75% of the value, for which they are much more likely to be accepted, while the remaining 20% is provided in the shape of a loan from the Government.
No interest will be charged on the equity loan portion for the first five years. The loan will need to be repaid alongside the mortgage at the end of the term.Can I get a Mortgage?