Home-to-Buy is one of the best initiatives by the government to support home buyers with little money to pay the deposit. If you have just 5% of the deposit money then the UK government’s Home-to-Buy scheme would come to your rescue.
There are two methods for it:
Mortgage guarantee loan: This is not just for the first time buyers. If you already own a house then, you can get benefited from this method. If you have just 5% of the deposit then you can apply for the rest 95% from a UK lender. As most lenders would ask for a bigger deposit, the government takes guarantee of the loan. The guarantee is between the lender and the government. To know more about how it works, you can check our website freepricecompare.com or call our expert agents on 08008807656.
Equity loan: This is only available for newly built homes. You need to pay a 5% deposit and the government would offer you a loan up to 20% as a top up to your deposit. So, you just need to get 75% of the mortgage from the lender. The loan is separate from the mortgage and is between you and the government. It is interest free for the first 5 years and you need to pay interest in the sixth year. You can pay back the loan anytime which could be within 5 years, when you sell the home or at the end of the mortgage. However, if you pay back within the first 5 years then you don’t need to pay any interest. Whenever you pay up the loan, you also have to repay 20% of the sell price to the government.
We can help you decide which option is best suited for you. Some ground rules for both the schemes are:
You need to pay at least 5% deposit to the lender
It should be the only property you own and you must live in it
You need to qualify the eligibility criteria of the lender
It must cost under £600,000.
You can get more details from our trusted team of mortgage advisers. All you need to do for acquiring a dream home is to manage the 5% deposit amount and then check our website freepricecompare.com or call us on 08008807656.