Centrado advises that before you start, contact us to see if you could get accepted for a standard mortgage. “- A qualified mortgage advisor can assist you with your initial enquiry and if you have at least a 5% deposit, it could well be possible.
If not…don’t panic as we are experts in Help to Buy mortgages. These types of mortgages have been set up with the Government specifically to make the property ladder more accessible. They are designed to help anyone struggling to save a deposit for their first home or move up the property ladder as they have limited equity.
A mortgage supported by the Help to Buy: Mortgage Guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans. Put simply if, in the worse-case scenario, a borrower has their home repossessed, the Government will cover some of the losses to the lender. This then gives the lender confidence as they are insured.
There are two elements we can help you with for the Help to Buy scheme
Equity loans are available to first time buyers as well as homeowners looking to move.
The home you want to buy must be newly built with a price tag of up to £600,000. See more here.
To secure a mortgage with the Help to Buy scheme, the buyer is only required to raise 5% of the property value as a deposit. The government will “help” with a further loan of up to 20% through the Homes and Communities Agency (HCA). With a combined deposit of up to 25%, you will then have access to more attractive mortgage rates from lenders participating in the scheme. The government’s 20% contribution of the loan is then competitively priced in order to keep things easy for you the buyer. The Government has put many beneficial factors in place including for the first five years the 20% contribution is interest-free.
Unlike the Equity Loan part of Help to Buy, the Mortgage Guarantee element applies to both new-build and existing homes. (Maximum purchase price £600,000)
Centrado have worked closely with The Mortgage Guarantee element of Help to Buy since its launch. It is designed to give first-time buyers and home movers with a small deposit a better chance of getting a mortgage. Our team has an in-depth knowledge of this The Mortgage Guarantee scheme, which began in October 2013.
(Please note: The scheme is currently scheduled to end December 31, 2016)
Buyers are required to raise 5% of the property value; the government will then provide a guarantee for a further 15%. This gives our lenders the peace of mind to lend larger mortgages and at lower rates. Centrado would like to add that The Mortgage Guarantee scheme is a ‘behind-the-scenes’ arrangement between the lender and the government. You will be asked to sign a declaration, but it will not affect any of your rights when entering into the scheme.