If you are looking to buy a new property but don’t quite have the funds you may be able to apply for the Government Help to Buy Scheme and purchase your dream home through Hugh Grover Associates.
What is the Help to Buy Scheme?
The Help to Buy Scheme centres on equity loans, which help finance property purchases by those who otherwise could not afford to buy a home. These loans are available in England and on properties up to the purchase price of £600,000.
How Does it Work?
As the purchaser you will have to contribute 5% of the property price as a deposit. The government will then loan you 20% of the cost to put towards your purchase. A mortgage will then cover the remaining 75%.
So, if the house you intend on buying is £200,000, you will have to pay £10,000 and the equity loan will be £40,000.
No fees will be charged on this loan for the first 5 years as a home owner. In the 6th year a fee of 1.75% of the loan value will be required and this will increase each year according to the workings of Retail Prices Index plus 1%.
You will be contacted just before the first payment is required and you will receive annual statements of your loan. Be aware however that fees do not count towards paying off the equity loan.
How Do You Pay it Back?
When you eventually decide to sell your home you will be expected to pay back the loan. Also, if you decide to stay where you are, after 25 years you will have to pay it off completely. This amount you pay back may also be influenced by the market value of the property. You can always pay back the loan before the required date though.
Can I Get an Equity Loan from Help to Buy?
A Help to Buy equity loan is available to first time buyers or homeowners looking to move house. The property you wish to purchase must be a new build from a Help to Buy registered builder and be located in England. Wales, Scotland and Northern Ireland run different but similar schemes.
To apply for an equity loan you will need to contact a Help to Buy agent in your local area or the area where you wish to move to. They will sort everything out for you. Be aware however that if you apply for this scheme you cannot sublet your home and it must be your only residence.
Want information about available Help to Buy properties in Islington? Then speak to one of our agents at Hugh Grover Associates.
Huge Grover Associates is one of London’s most respected estate agencies and has been helping people buy and sell homes in and around Islington for over 20 years. For more information about homes in Islington, visit Hugh Grover online today.