If you’re hoping to take that first step onto the property ladder soon, you could be closer to saving for your deposit than you think.
The government has created several Help to Buy schemes to help hard-working young people take steps towards owning their own home including Help to Buy: Shared Ownership which requires a deposit which is typically much lower than buying traditionally and Help to Buy: Equity Loan which makes it possible to buy a home with just a 5% deposit.
Additionally, the Help to Buy: ISA pays first-time buyers a government bonus. For example, save £200 a month and we’ll add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000.
If you can’t quite afford the mortgage on 100% of a home, Help to Buy: Shared Ownership offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to.
You could buy a home through Help to Buy: Shared Ownership in England if:
· your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
· you are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.
With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programs from housing associations. You’ll 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.
With a Help to Buy: Equity Loan, the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
But whichever scheme you decide to go for, if you are saving to buy your first home the best place to start is by saving money into a Help to Buy: ISA and the Government will boost your savings by 25%. So, for every £200 you save, you receive a government bonus of £50. The maximum government bonus you can receive is £3,000.
The Help to Buy: ISA is available from a range of banks, building societies, and credit unions and better still, the accounts are available to each first-time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.
So, take advantage of the options on offer to you and start planning for your new home today! Call our office on 01934 512537 or email us at firstname.lastname@example.org and we will be happy to put you in touch with our recommended Financial Advisor who can talk you through the options available to you and help make your dream a reality!