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The Government’s Help to Buy schemes are to help buyers with small deposits (5% or over). Take a look to see if this could be something that could be of help to you. Thomas Morris can introduce you to Embrace Financial Services who have specialist advisers who are able to discuss Help to Buy further and see if you are eligible.
Help to Buy is a government scheme designed to help first time buyers who have never owned a property before to advance up the property ladder.
Who is eligible?
Help to Buy: Equity Loan (2021-2023) are available to first time buyers. The home you want to buy must be newly built with a price of up to £407,400 for the East of England (see the Help to Buy site for more regional caps)
How does it work?
With a Help to Buy equity loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You must buy your home from a homebuilder registered for Help to Buy: Equity Loan.
The amount you pay for a home depends on where in England you buy it.
When getting a mortgage you will be able to borrow up to a maximum of 4.5 times your salary.
Help to Buy Equity Loan example
For a property worth £400,000
How do I pay back the Help to Buy equity loan?
You must pay back the loan after 25 years or when you sell your home - whichever comes first.
You will not be charged any interest on the 20% loan for the first five years of owning your home.
However a management fee of £1 a month will be applicable from the date of purchase for the duration of the equity loan.
From year six, a fee of 1.75% is payable on the equity loan, which rises annually by CPI (Consumer Price Index) inflation plus 2%.