Help to Buy - Expert Conveyancing Solicitors

By Lorraine Imhoff

Written by Lorraine Imhoff

Many would-be home-buyers are missing out on mortgages under the government's Help to Buy guarantee scheme because they think it doesn't apply to them. Don't be one of them!

The Help to Buy scheme has been greatly expanded and can now provide help to far more buyers than previously. So if you thought that you wouldn't be able to buy a home because you would have to borrow more than 80% of the price, think again.

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Here we demolish some of the most common misunderstandings about the Help to Buy.

  • “It's only for first-time buyers” - No, it's now available to people who already own a home or have done so before, as well as first-time buyers.  So if you already own a home but want to move, this is a great opportunity. (You will have to sell your existing home at the same time as, or before, you complete a purchase with a Help to Buy mortgage.)
  • “Its only available on brand-new properties” - No, you can now get help to buy any property however old it is. So you need no longer be restricted to new developments, you can choose an existing property – perhaps somewhere in a more convenient location for you. But of course it's still available on new homes if that's what you prefer.
  • “You can only get help if you are buying a cheaper home” - In fact the scheme is available on all homes worth up to £600,000 which covers the vast majority of residential properties.
  • “Help to Buy is only available in certain areas” - No, it covers the whole of the UK.
  • “You can only get mortgages through a few lenders” - well, this is partly true, as not all lenders have joined the scheme. However those that have include all the major high-street banks as well as some other lenders, so you have plenty of choice.
  • “You will have to make higher mortgage repayments” - No, the monthly mortgage repayments will be calculated in exactly the same way as for any other mortgage. Of course the exact amount you pay will depend upon the amount you borrow and the interest rate applicable, but you can get a quote before making a full application.

Get a mortgage with just a 5% deposit

The Help to Buy mortgage guarantee scheme is quite straightforward in operation. Provided that you have available a cash deposit of at least 5% of the value of a property you can apply for a mortgage for the remainder.

While many lenders will not lend more that 80% of the value of a property, with a Help to Buy mortgage you can borrow up to 95%. The mortgage company then gets a guarantee from the government which covers the amount by which the loan exceeds 80% of the price.

Buyers do not have to pay any fee for this guarantee, nor do they have to pay any additional fees just because they are applying under the Help to Buy scheme.

You will need to meet the lenders usual income checks and other lending criteria, and show that you have not had any previous financial difficulties. Joint incomes can be considered in the usual way.

There are a few restrictions on the scheme:

  • The property must be for your own occupation, you can't let it to anyone else.
  • Buyers mustn't own another property anywhere in the world at the time the purchase and mortgage are completed. (It's OK if you own a home which you will be selling at the same time as you complete the purchase.)
  • Your mortgage must be a repayment one, not interest only. Offset and guarantor mortgages are also excluded from the scheme.
  • You can't use the mortgage guarantee scheme with any other government schemes such as equity loans or shared ownership. Nor can your deposit for the property come from a government scheme.

Don't forget you will need a good Solicitor

You should bear in mind that in addition to your cash deposit you will need to pay the land registry fees, any Stamp Duty, legal and survey fees out of your own resources. Legal fees will be no higher than for any other purchase, and you can easily get a quote for these here.

Your solicitor will be happy to explain the details of the scheme to you. It is definitely worth instructing a solicitor who has plenty of previous experience with Help to Buy purchases, and we have found you the best around – and at remarkably low cost.

Don't forget our price guarantee – what we quote is what you pay. Unlike some firms with us there are no hidden extras to come as a nasty surprise on completion.

Get a free quote today or call us on 0800 038 6699 for help with your help-to-buy purchase.

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