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Help to Buy is a Government initiative to assist people getting on or moving up the housing ladder in Gloucester and the whole of the UK who can afford mortgage payments but are struggling to raise a deposit.
Last updated 5/3/2020
Many people in Gloucester and throughout the UK are unable to purchase a home or move house because of the large deposits required in today's difficult mortgage market.
The Help to Buy scheme is a government scheme which could make getting on to, or moving up, the housing ladder more accessible. It helps existing home owners and first time buyers purchase a home with as little as 5% deposit.
If you are looking to purchase a property in Gloucester up to the value of £600,000 there are two Help to Buy schemes available:
What is the Help to Buy Equity Loan scheme?
The Help to Buy - equity loan scheme is only available with new build homes.
Under the scheme
- Government provides equity loan of 20%
- You arrange a mortgage for 75%
- Meaning your deposit is 5%
You won't be charged loan fees on the 20% loan for the first five years of owning your home.
If the home in the example above sold for £210,000, you'd get £168,000 (80%, from you mortgage and the cash deposit) and you'd pay back £42,000 on the loan (20%). You'd need to pay off your mortgage with your share of the money.
Many new homes developers advertise plots that are eligible for Help to Buy in Gloucester. Here is a list of the current new homes for sale in Gloucester.
Am I eligible for the Help to Buy equity loan?
To find out if you are eligible you simply need to contact a mortgage advisor or mortgage lender that is participating in the scheme. However, use the quick checklist below to see if you could be eligible for the scheme:
- Buyers need a minimum of 5% deposit
- Available on all previously owned and new build property up to the value of £600,000
- Must be your only property
- Available for properties in the UK
- Borrowing from a participating mortgage lender.
How is Help to Buy Equity Loan changing in 2021?
A new version of the Help to Buy scheme will operate from 1 April 2021 until 31 March 2023 which introduces changes to ensure the scheme is better targeted towards those who most need support to achieve home ownership. The key changes are:
- The scheme will only be available for first time buyers, defined as those who haven't previously owned or purchased property.
- The scheme will introduce regional property price caps based on local markets, which will set the maximum price of the new build homes that can be bought with Help to Buy in any region.
The regional cap for the South West is £349,000
*Eligible applicants will be offered an equity loan up to a maximum of 20% of the purchase price (based on the open market value). Applicants are required to fund at least 80% of the purchase price by means of a conventional mortgage, savings and any deposit where required. For the first five years there is no fixed fee charged on the equity component. At the start of year six a fee of 1.75% is payable on the equity loan, which rises annually by RPI inflation plus 1%. The equity loan is provided by the HCA and held as a second charge. Terms and conditions apply and full details will be provided on request. This offer is subject to status and only available on selected properties in England only. It is not offered with any other promotion. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE