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The London Help to Buy scheme could help you realise the dream of owning your own home in the capital. When you put down as little as a 5% deposit on a newly built home, you can get a Government equity loan – for up to 40% of the purchase price.
London Help to Buy equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.
You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with London Help to Buy.
London Mortgage Solutions knows all about the Help to Buy process and products currently on the market. Below are some points to assist your buying experience;
Help to Buy: Equity Loan
The Help to Buy: Equity Loan was initially a scheme to give house builders confidence that there will be buyers for their product if they build the homes, as people were struggling to get mortgages and It was also designed to help people get on the property ladder or move up the property ladder. It gives borrowers up to a 40% loan on a New build Property up to £600,000 (outside London it is 20%) in 32 London Boroughs.
Example purchase
If the total value of the property is £600,000 you will need a £30,000 deposit (5% of total value). 40% of the loan (£240,000) will be provided by Help to Buy and the remainder (£330,000) will be your mortgage.
In the scenario, you will need to be earning £73,000-£82,000 to be able to qualify for the mortgage of £330,000 subject to no other borrowing in your name.
What you need to bring to the table
- Deposit wise, you must have 5% saved
- You can borrow a maximum of 4.5 times your income and 50% of any bonuses can be taken into account
- You should be less than 75 years of age
- You should be a First Time Buyer or Homemover
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We help customers navigate the options available to them through clear information and guidance, this in turn enables them to understand their choices and make informed decisions.
Help to Buy ISA & Lifetime ISA
Help to Buy ISAs and Lifetime ISAs are specifically designed to help you save for your first home. These ISAs can also be used in conjunction with the scheme above. If you’re planning on buying a home in the next few years, we think this is a no-brainer. Here are the key differences to help you choose between the two accounts:
Help to Buy ISA
- You can open an account from the age of 16
- You can make an initial lump sum payment of up to £1,200 and then set up a direct debit for up to £200 each month afterwards.
- The government will add £50 for every £200 saved in your account up to £12,000. So, that’s a maximum bonus of £3,000.
- The bonus is available on properties worth up to £250k or £450k in London.
- You will need at least £1,600 deposited before you can claim your bonus of £400.
Lifetime ISA
- You can open a Lifetime ISA if you’re aged between 18 and 40
- You can deposit up to £4,000 a year in total – no monthly limits
- Every year, the government bonus of 25% is deposited straight into the account so you can easily track how much you can put towards your deposit. Maximum bonus of £3,000
- The bonus is available on properties worth up to £450k anywhere in the UK
- You can’t withdraw the savings in the first 12 months so if you’re planning on buying in the next 12 months, go for the Help to Buy option. There is a charge if you are withdrawing from the account and not buying your first home
The London Help to Buy scheme could help you realise the dream of owning your own home in the capital. When you put down as little as a 5% deposit on a newly built home, you can get a Government equity loan – for up to 40% of the purchase price.
London Help to Buy equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.
You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with London Help to Buy.