This is a Government scheme that has been created to try and help hardworking people like yourselves to take the first steps onto the property market ladder with a new home purchase. We have experience at Wilson Thomas of this scheme, and it is worth talking to us to find out which developments that we have of new properties where the scheme is available, as this is obviously a moving feast and not all developers are on the scheme.
How does it work? With a Help to Buy – Equity Loan the Government lends you up to 20% of the cost of your new build home, which means you will only need a 5% cash deposit and a 75% mortgage will take up the rest. One of the major features of this scheme is that you will not be charged loan fees on the 20% loan for the first 5 years of owning the new home. There is a current ceiling of £600,000 as a maximum for a purchase price within the scheme. The Government does retain their share in your home and, therefore, if, for example you purchased at property at £200,000, you having placed £10,000 down as a 5% deposit the Government, with their 20% loan of £40,000 and 75% mortgage which equates to £150,000, should you then sell the house for £210,000 you will receive £168,000, but you would be required to pay back £42,000 on the loan, i.e. 20%. You need to pay off your mortgage with your share of the money. For a more detailed explanation of the whole scheme it is worth visiting the official Government Help to Buy website.