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Introducing the new Help to Buy Scheme by Eric Alan
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Introducing the new Help to Buy Scheme |
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Home Improvement,Construction,Consumer
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Help to buy is a new government initiative to help stimulate the purchasing of new homes, or as they put it, "the Government wants to help more people across the country make the aspiration of home ownership a reality" and is divided into the following two schemes:- An equity loan where the government will loan you up to 20% of the value of the property
- A mortgage guarantee incentive to encourage lenders to supply a greater volume of mortgages to buyers with small deposits
There are a few key terms and conditions to each scheme, for example both schemes require a minimum of a 5% deposit, which are: Help to Buy Equity Loan: - New build only
- You’ll need a minimum 5% deposit to qualify
- This expands the existing First Buy scheme and is now available to all, not just first-time buyers
- The Government will lend you up to 20% of the value of your property through an equity loan, which can be repaid at any time or on the sale of your home So you will only need to secure up to a 75% mortgage from a bank or building society
- The expanded scheme is available from 1 April 2013. It will run for 3 years and provide £3.5billion of additional investment
- Maximum home purchase of £600,000
Help to Buy Mortgage Guarantee: - New build and existing homes
- You’ll need a deposit of as little as 5% for this scheme
- Available to existing homeowners as well as first-time buyers
- You’ll need to secure a mortgage for your purchase. The Government guarantee will encourage lenders to offer better access to low-deposit mortgages
- Available from January 2014, this scheme will run for 3 years
- Maximum home purchase of £600,000
Both incentives have so far resulted in an initial boost in share prices for developers at the prospect of increased sales, after all, should there be a rush on the scheme after it begins the only homes eligible for purchase will be new build ones, however as was the case with last year’s NewBuy initiative only time will tell on how successful it proves to be. At the very least, by extending the scheme to second time buyers looking to move up the ladder it is possible there will be a greater supply of properties suitable for first time buyers, who will be able to take advantage of the mortgage guarantee scheme when it kicks in January 2014.
Related Articles -
help to buy, new homes,
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