Help to Buy
Help to Buy
What is help to buy: mortgage guarantee?
Following the financial crisis, many credit-worthy people are finding it difficult to get a mortgage today because of the large deposit required. To help address this issue, the Government has created Help to Buy: mortgage guarantee scheme to increase the number of low-deposit mortgages available for credit-worthy households.
Launched in October 2013 but not available until the 2nd January 2014, the Treasury has offered three different bands of guarantee for different Loan to Value (LTV) amounts:-
· 80% – 85%
· 85% – 90%
· 90% – 95%
Specific criteria will apply in order to gain eligibility:-
· You will be planning to live in your house and not rent it out (it will be your main residence)
· You cannot own any other property, in full or part
· The property must be in the UK
· You and any joint applicant must be over 18
· The purchase price or valuation must be no more than £600,000
· You have a deposit of at least 5% but less than 10%
· The mortgage can only be taken out on a capital and interest repayment basis only
· The mortgage must be to buy your only property so you cannot use it to buy a second or further home
· The mortgage cannot be for a shared equity or shared ownership purchase
· You and any joint applicant are able to meet the governments affordability criteria
· You and any joint applicant are able to meet underwriting criteria such as an acceptable valuation and proof of income etc
· The scheme is available to existing homeowners and first time buyers and can used to purchase a new build or existing home.