Help to buy scheme

Help to buy mortgage guarantee

What is 'Help to Buy'?

Help to Buy is a scheme whereby the government offers various incentives to the mortgage lenders or builders, which assists in house buyers purchasing a property.

There are various help to buy schemes, but the two main ones are 'Help to buy mortgage guarantee' and 'New buy' What is 'Help to buy mortgage guarantee'?

Help to buy mortgage guarantee is for everyone and property types, (providing you qualify for a mortgage). Whereas the New Buy have restrictions such as New houses or/first time buyers only. Not all lenders participate in these schemes and there are big differences in the mortgage interest rates on these typically high loans to value (LTV).

How much deposit is required?

Principally a minimum 5% deposit is required by the applicant and the remaining up to 20% of the loan is guaranteed by the government. Not dis-similar from 'Mortgage Indemnity Guarantee' (MIG) or Higher Lending Charge (HLA) in the past. Which were insurance policies on high loan to value mortgages charged by the mortgage lenders and paid by its customers, by usually adding to the mortgage advance.

When did the scheme start?

The scheme started in January 2014, but the government had opened the scheme 3 months earlier, allowing applicants to be ready to complete, in January 2014.

Help to buy mortgage guarantee main points are;

  • Available for new & existing properties owned to values of £600,000.
  • Available for 80% to 95% loan to value mortgages.
  • Available for new and existing home owners.
  • Only available for:

    • Repayment mortgage.
    • Full income variation mortgages.
    • Good credit history applicants.
  • The scheme is scheduled to run for three years and reviewable every September by the Bank of England.
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Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it. Think carefully before securing other debts against your home. Buy to let (pure) and commercial mortgages are not regulated by the FCA. No broker fee is charged typically; as commission received from the mortgage lender pays our minimum fee of £495 and any shortfall will be charged only on completion of your mortgage. Vincent Burch Ltd. is an Appointed Representative of JLM Mortgage Services Ltd., authorised and regulated by the Financial Conduct Authority, (FCA), registration number: 300629. The overall cost for comparison is 4.19% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.

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