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.