If you are interested in getting a mortgage but only have a small deposit, you’ll need a minimum deposit of 5% and the scheme will give you what’s known as an “Equity Loan” which allows you to buy your new house. The Government then lends you up to 20% of the value of the new property, on top of your ordinary mortgage, which you can repay within 25 years or if you were to move. When you sell or if you wish to repay your equity loan, the government takes back 20% of the value of the house at that time. You can have a larger deposit and take less than 20% as an equity loan, it all depends on you.
So, if you have a 5% deposit and a mortgage offer of 75%, then the scheme will top up the balance of 20% so that you can buy.
The scheme is run by the housebuilders themselves and housing associations who deal with new homes, which makes the initial application relatively straightforward. However, your legal adviser needs to understand fully the obligations and requirements of the scheme.
While it is a simple scheme, in essence, the procedure which we will need to follow on your behalf and the documentation which you will be required to complete is quite complicated.
You need to be fully aware of what you can and cannot do in circumstances where you have this type of loan.
Goddard Dunbar is a preferred supplier of conveyancing services to buyers of new properties on various developments currently being constructed by a major developer and our expertise benefits our clients in bringing their purchases to a speedy and satisfactory conclusion, due to our family with extensive documentation supplied by the developer at the beginning of the transaction and also the Help to Buy Scheme and its documentation and requirements.
More importantly, because we know what we are doing as explained above, we do not charge you over the odds for acting on your behalf in the purchase of your new home just because of the equity loan. We will quote a price to you which is both competitive and fixed, so it will not change once we have started working for you.