June 26, 2018 1:59 pm
Ways To Buy
Help to buy
Help to buy gives you a boost when you can only afford a 5% deposit. The scheme isn’t limited to first time buyers but the vast majority of people that apply for the scheme fall under the first time buyer category.
The Help To Buy was launched back in 2013 and there were two parts, Equity loan and Mortgage Guarantee.
The remaining part of the help to buy scheme is the equity loan. This scheme requires a 5% deposit and the government will offer you an interest-free loan of a further 20%. So the remaining 75% is covered by a standard mortgage.
With an equity loan there is no interest to be paid for the first 5 years. When you hit 6 years, the interest starts at 1.75%. The rate will increase year by year at an RPI measure of inflation plus 1%.
With an equity loan you can opt to pay fees in a single annual payment or monthly direct debts.
Starter Homes Scheme
The government in March 2015 announced the launch of a new starter homes scheme. Starter homes will be for buyers aged between 23 to 40 who have never owned their own home. There will be over 200,000 new homes being built under the scheme and will; be sold at a discounted price of 20%. Starter homes will not be able to be resold or rented at their open market price for the first 5 years.
A shared ownership allows you to buy a share of a property form a local Housing Association. Having a shared ownership gives you the option to ‘staircase’ which basically gives you the chance to buy chunks of the property as and when you can until you own 100%.
To qualify for a shared ownership, you do not have to be a first time buyer and your household income mustn’t exceed the limit of 80k.
Right To Buy
The right to buy scheme allows council tenants with at least 3 consecutive years tenancy to buy their property at a significant discount. Council tenants will benefit from deeper discounts if they’re looking to buy their house.
Stamp duty is payable on all homes worth over £125,000. However, if you’re a first time buyer the first 300k is exempt from stamp duty, up to a max value of 500k.
This basically means if your property is going to cost more than 300k your stamp duty fee will be zero.
This post was written by millermetcalfe