The dedicated team at Leap Finance can take you through all the options and government initiatives which are helping thousands of people to purchase and own their homes.
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The Help to buy Scheme is here to help
The government’s new Help to Buy scheme now makes it possible to buy a new or existing home with just 5% deposit. The Government has created the Help to Buy scheme to help hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up to the next rung, the Help to Buy Scheme makes it possible to buy a new-build or existing home valued up to £600,000 with as little as a 5% deposit.
With the Help to Buy equity loan scheme, the Government lends you up to 20% of the cost of your new-build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged any loan fees on the 20% loan for the first five years of owning your home.
Example: for a home with a £200,000 price tag
If the home in the example above sold for £210,000, you would get £168,000 (80%, from your mortgage and the cash deposit) and you would pay back £42,000 on the loan (20%). You would need to pay off your mortgage with your share of the money.
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. Because of this support, participating lenders can offer home buyers more high-loan-to-value mortgages (80-95%). You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.
Example: for a home with a £200,000 price tag
Other housing options
Shared ownership schemes (part buy/part rent) are provided through housing associations. You buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. You can buy bigger shares at a later stage when you can afford to. With shared ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You will need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings.
Shared ownership properties are always leasehold and you can buy your home this way if your household earns £60,000 a year or less. In London this is higher: £66,000 a year for a home with one or two bedrooms, or £80,000 for family homes with three bedrooms or more. If you are a first-time buyer (or you used to own a home, but can’t afford to buy one now) or If you rent a council or housing association property, then you will receive priority for buying a home through shared ownership. The same priority is given to Armed Forces personnel.
Local authorities with shared ownership home building programmes may have further priority groups, based on local housing needs, such as people already living or working in the area.
People with disabilities
If you have a long-term disability, the Home Ownership for People with Long-Term Disabilities (HOLD) scheme can help you buy any home that is for sale on a shared ownership basis. You can only apply for HOLD if the properties available through the other home ownership schemes do not meet your needs, for example, if you need a ground floor property.
You can get help from another home ownership scheme called Older People’s Shared Ownership if you are aged 55 or over. It works in much the same way as the general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you will not have to pay rent on the remaining share. To buy a home through a shared ownership scheme contact the Help to Buy agent in the area you want to live. You can also find out further information about shared ownership on www.gov.uk
Right to Buy
If you are a council tenant with a least five years’ tenancy, you may be eligible to buy your home at a significant discount. Some housing association tenants may also be eligible. To check your eligibility and find out more, visit www.gov.uk
NewBuy lets you buy a new-build home with a purchase price of up to £500,000 with a deposit of only 5%. To be eligible for NewBuy, your new home must be: Your main home (you cannot use NewBuy to buy a second home or a buy-to-let property) Fully owned by you (you cannot use NewBuy for shared ownership or Help to Buy: equity loan purchases) Built by a builder taking part in the scheme.
You do not have to be a first-time buyer and there is no limit on your level of income. But you cannot use NewBuy with any other publicly funded mortgage scheme.