Help to Buy: Equity Loan is a government scheme to help first-time buyers purchase a home with just a 5% deposit. Homeowners can borrow an equity loan to cover from 5 and up to 20% of the cost of a new-build home.
Help to Buy has been designed to help people get on the property ladder. As house prices are continuing to increase, it supports first-time buyers to bridge the gap between deposit and mortgage so they can afford to purchase their first home.
The scheme is coming to an end soon. If you’re wanting to apply, you’ll have until 31 October to reserve a home and apply for the scheme.
There are some good benefits to the scheme:
- You only need a 5% deposit of the full purchase price
- You own your own home
- You don’t pay any interest on your loan during the first five years
- You’ll have 25 years before you need to pay your loan back in full
- You’re able to buy a high spec new-build home
What else do you need to know?
Who is the scheme for?
First-time homebuyers over the age of 18 years buying a home in England.
What’s the criteria I need to meet to qualify?
You need to be:
- 18 or over
- a first-time buyer
- able to afford the fees and interest payments
You won’t be able to get the equity loan if you’ve ever:
- owned a home or residential land in the UK or abroad
- had any form of sharia mortgage finance
How do I apply?
- Reserve a new-build home with a homebuilder registered with the scheme
- Apply online through the Help to Buy agent in your region
- Your Help to Buy agent will assess your eligibility for the scheme and issue an authority to proceed
- An authority to proceed allows you to apply for a repayment mortgage and progress your application to exchange of contracts, where the agent will issue you an authority to exchange
- Once all the paperwork and dates are agreed and the home is built (practical completion), your agent will issue you a transaction confirmation and funds will be transferred to the homebuilder
- After legal completion your Help to Buy agent passes your details to the equity loan administrator to manage the account until it’s paid in full
When can I pay back my loan?
You can pay back part of all your equity loan at any time. Your repayments are based on your equity loan percentage (from 5% and up to 20%) and the market value of your home at the time you want to make a repayment.
Before you make a repayment, you’ll need a market valuation report from a chartered surveyor.
You’ll need to repay all of your equity loan when you reach the end of the loan term (normally 25 years), pay off your repayment mortgage or sell your home.
We’ve got some fantastic homes including The Hedgerows at Pilsley, available. They are the perfect home for first-time buyers. Get in touch with us to find out more