These days property prices are very high and many first time home buyers find it intimidating to imagine saving up a 20% deposit. Fortunately, the government recognises this and has created a special scheme that will help first time home buyers to purchase their first property – called the Help to Buy Scheme.
Who Qualifies for Help to Buy?
In order to be eligible for the Help to Buy scheme, you must have deposit for your home of at least 5% and be looking to purchase a home worth less than £600,000. You should also be looking to live full time in the property, rather than renting it out or using it as a second home.
How Does Help to Buy Work?
The way it works is that you will place a deposit of at least 5% on the property and you will be able to borrow up to 95% of the price of the property from your mortgage lender. Once you have done that, the government will then guarantee any of your mortgage borrowing above 80% of your property’s value.
For example, if you took out an 85% mortgage for your home, the government would be able to guarantee to repay your mortgage lender up to 10% of the value of the mortgage in the circumstance that you defaulted on the loan.
Tips for First Time Home Buyers
If you are planning on buying your first home, here are some helpful tips that you should keep in mind:
First of all, get a handle on your finances and see how much you can afford to save for a deposit. Remember, the bigger your deposit the better options you will have for a good mortgage deal.
- Also, before you buy your first home you should take a look at your credit rating and make sure it is as good as it can be.
- When you are planning to buy your home, don’t forget to factor in the other expenses that are associated with buying. There are many fees, closing costs and much more.
- Also, remember that you will need to budget for all of the other costs of owning a home, such as maintenance, upkeep and a lot more – so don’t forget to budget these costs in.
Buying your first home can be complicated, so keep these tips in mind and take advantage of the government’s Help to Buy scheme if it applies to you.
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