Last month marked the six year anniversary of Help to Buy, with the initiative set to support over half a million buyers by 2020. Here at Countryside, we’ve been offering Help to Buy across all of our North West and West Midlands developments since it launched in 2013 and it’s made a real difference to many of our buyers looking to step onto the property ladder. Not sure if Help to Buy is for you? To help you better understand the process, we’ve answered your top questions about Help to Buy.
Can I have more than a 5% deposit?
Yes, Help to Buy only requires a minimum 5% deposit and the equity loan is up to 20%. So, if you have more than 5% you can still take advantage of the scheme. In fact, it’s possible to have up to 65% deposit, but you must have a minimum of 10% equity loan and a 25% mortgage to be eligible.
Can I use Help to Buy if I already own a home?
In order to use Help to Buy, you cannot own a home when applying. The scheme is designed to assist people onto the housing ladder. So, if you’re a homeowner looking to move, you will be expected to have sold your current home already. If you’re planning on buying your next home with Countryside, then you could take advantage of our Assisted Move scheme. Using this initiative means that we’ll help sell your house, and pay the estate agent fees, leaving you free to use Help to Buy on your next home.
Is my Help to Buy application the same as a mortgage application?
No, the mortgage is not included with Help to Buy and you will need to apply for one separately.
What happens after five years?
The first five years of the Help to Buy equity loan is interest-free. Then, you’ll be charged 1.75% interest on the outstanding amount, which will increase each year by RPI (Retail Price Index) plus 1%
How will the Help to Buy loan be collected?
The 20% Government loan can be paid at any time. You can either pay the full amount, or half of the total paid within the five-year interest-free period To pay off your equity loan, you will need to contact the Mortgage Administrator who will guide you through the process. You can also pay off the loan by remortgaging, known as staircasing, or when you sell. If you decide to pay monthly after the five-year period, then ensure you’ve factored in the interest fees.