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Help to Buy Mortgage Guarantee Scheme Ends
The Government’s Help to Buy Mortgage Guarantee scheme ended on 31st December 2016. The scheme had been in place for over 3 years helping over 86’000 people with their property purchases.
The scheme allowed mortgage lenders to purchase a guarantee from the government that they would cover any losses if the borrower defaulted and the property had to be sold.
What schemes are available to help me purchase a property?
Although the mortgage guarantee scheme may have ended, there are still a number of other schemes available that property purchasers may be able to use.
Help to Buy Equity Loan
With the Help to Buy Equity Loan scheme you must have a 5% deposit and be purchasing a new build property. If you are eligible, the Government will lend you a further 20%, meaning you will only need a mortgage for the remaining 75%. There are no fees on the Government loan for the first five years. The scheme is available to first time buyers and those looking to sell their current property.
Help to Buy ISA
The Help to Buy ISA is only available to first time buyers. With this type of ISA account, you can deposit up to £1200 when first opening the ISA, and a further £200 per month. Once you come to purchase your property, the Government will add an additional 25% bonus to your savings up to the value of £3000. However if you are planning to purchase with your partner, who is also a first time buyer, you can each have an account and potentially double your savings bonus.
Shared Ownership allows you to purchase a share of your property between 25% and 75%. You then pay a low rental fee on the remaining share. This may be particularly useful where your earnings won’t allow you to obtain a mortgage based on 100% value of the home. The scheme is available to first time buyers, as well as those that have previously owned a property.
The Government will launch a second ISA savings bonus scheme in April 2017. You can save up to £4000 per year, and receive a 25% bonus. You can use some or all of the money towards buying your first home, or use it towards retirement. You will not be able to use the Lifetime ISA in conjunction with the Help to Buy ISA when purchasing property.
At Fishers Dewes we regularly assist home buyers that are utilising one of the Government backed schemes. All of our property lawyers will be able to explain the process based on the scheme you intend to use. We provide fixed fee conveyancing quotations, with no hidden extras. Meaning you know the exact costs of your conveyancing transaction from the outset.
For more information on any of the points covered in this blog, or for a no obligation quotation e-mail email@example.com.