Several government-backed schemes aim to give home buyers a helping hand onto the property ladder.
If you can use one of these schemes, lenders will still want to ensure you can afford to pay your mortgage.
Help to Buy
Those with a small deposit, could be eligible to use the Help to buy scheme:
Equity Loan scheme: available to first-time buyers and existing homeowners who want to buy a ‘new build’ house. The purchase price must be no more than £600,000. Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price.
The Help to Buy equity loan scheme will be extended until 2023. However, this extension will be restricted to first-time buyers purchasing newly built homes.
From 2021, there will also be new regional price caps which could reduce the maximum value of home that can be bought through the Equity Loan Scheme.
Help to Buy: Equity loans
How they work
You need at least 5% of the sale price of your new-build flat or house as a deposit.
The government lends you up to 20%, or 40% if you live in London, of the sale price.
You borrow the rest (up to 75%, or 55% if you live in London) from a mortgage lender, on a repayment basis.
The equity loan must be repaid after 25 years, or earlier if you sell your home.
You must repay the same percentage of the proceeds of the sale as the initial equity loan (i.e. if you received an equity loan for 20% of the purchase price of your home, you must repay 20% of the proceeds of the future sale).
If you’re looking to buy a property in Mansfield or anywhere across the country then we are here to help. Our job is to help you identify and secure the best possible mortgage for you. This means that you can purchase the property of your dreams for the best price possible.