Help to Buy

Want to buy a home but can't quite afford it?

There are a couple of initiatives in place to help you get on the property ladder

As one of London’s top professional mortgage brokerage, Coreco knows all about the Help to Buy products currently on the market. Here are some handy pointers:

 

Help to Buy Equity Loan

The Help to Buy Equity Loan was initially a scheme to give house builders confidence that there will be buyers for their product if they build the homes, as people were struggling to get mortgages. It gives borrowers up to a 40% loan on a New build Property up to £600,000 (outside London it is 20%) in 32 London Boroughs.

What you need to bring to the table

  • Deposit wise, you must have 5% saved up
  • You can borrow a maximum of 4.5 times your income and 50% of any bonuses can be taken into account
  • You should be less than 75 years of age
  • You should be a British First Time Buyer or Homemover

Example purchase

If the total value of the property is £600,000 you will need a £30,000 deposit (5% of total value). 40% of the loan (£240,000) will be provided by Help to Buy and the remainder (£330,000) will be your mortgage.

In the scenario, you will need to be earning £73,000-£82,000 to be able to qualify for the mortgage of £330,000.

 

Help to Buy ISA & Lifetime ISA

Help to Buy ISAs and Lifetime ISAs are specifically designed to help you save for your first home. These ISAs can also be used in conjunction with the scheme above. If you’re planning on buying a home in the next few years, we think this is a no-brainer. Here are the key differences to help you choose between the two accounts:

Help to Buy ISA

  • You can open an account from the age of 16
  • You can make an initial lump sum payment of £1,000 and then set up a direct debit for up to £200 each month afterwards.
  • The government will add £50 for every £200 saved in your account up to £12,000. So, that’s a maximum bonus of £3,000.
  • The bonus is available on properties worth up to £250k or £450k in London

Lifetime ISA

  • You can open a LISA if you’re aged between 18 and 40
  • You can deposit up to £4,000 a year in total – no monthly limits
  • Every year, the government bonus of 25% is deposited straight into the account so you can easily track how much you can put towards your deposit.
  • The bonus is available on properties worth up to £450k anywhere in the UK
  • You can’t withdraw the savings in the first 12 months so if you’re planning on buying in the next 12 months, go for the Help to Buy option.

 

10 Step Guide

As with all types of mortgages, our 10 step mortgage guide on how to avoid the pitfalls is always worth a read!

Things to consider

Do I want the security of fixed monthly payments?

How am I going to pay the loan back?

How much can I borrow?

How much deposit do I have?

Do I have money set aside for fees such as legal costs and stamp duty?

What exactly does the mortgage process involve?

Important

Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.

A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £495.

Everything you need to know to speed up your mortgage application.
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