If you are struggling to save the required deposit to get onto the property ladder, but are able to afford the monthly mortgage repayments, the Government is here to help.
It has recently launched the second phase of its popular Help to Buy scheme, which can provide a mortgage guarantee to those with just a 5 per cent deposit. The scheme will see the average size of a deposit required by lenders drop from £44,000 to £11,000, according to recent research by Zoopla.
It is welcome news for those looking to buy their first home, as well as existing borrowers who can use the scheme to move home. However I must stress that you must make sure you fully do your research to see if the scheme is right for you.
Here are a handful of tips to get you started:
1. Do your research – gather as much information as you can about the scheme. Visit Zoopla’s helpful Help to Buy page which can be found here – link: https://www.zoopla.co.uk/help-to-buy/
2. Get your financial affairs in order – banks will impose strict lending criteria to ensure you can afford the loan. Documents include up to a year’s worth of bank statements, although some lenders may only require six months. Three months of payslips, a passport, a utility bill to prove your current address and proof of a deposit such as a savings account statement are also required.
3. Speak to an IFA or visit a bank – discuss your options to see if you qualify for the scheme and what level of mortgage you might be able to raise. Banks offering loans under the mortgage guarantee scheme include Natwest, Halifax, Lloyds and RBS.
4. Don’t delay – there is likely to be high demand for the scheme early on. Whilst the guarantees don’t actually come into force until January, you can apply for the scheme now and lenders are offering home loans now.
5. Get searching for your dream home on Zoopla – the scheme applies to new build homes and pre-loved properties. The scheme applies to over 90% of properties currently on the market and all properties up to £600,000 are eligible for the scheme.
Some information contained herein may have changed since it was first published. Zoopla strongly advises you to seek current legal and/or financial advice from a qualified professional.