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First time buyer? How to get on the property ladder with Help to Buy

By July 21, 2022No Comments

For first time buyers, getting on to the property ladder in the current market poses a significant challenge. Luckily, there are a number of government initiatives to help make purchasing your first home more achievable. In this blog, we take a look at one of these – the Help to Buy Equity Loan.

What is the Help to Buy Equity Loan?

The new Help to Buy Equity Loan launched on 1st April 2021, to replace the previous Help to Buy scheme. Like the old scheme, the new loan allows first time buyers in England to purchase a property with just a five per cent deposit. The government will then loan you up to 20 per cent of the remaining cost of your home, or up to 40 per cent in London.

The Help to Buy Equity Loan is a great way for first time buyers without a large deposit to get on the housing ladder, however if you want to take advantage of the initiative, you will need to act quickly. The final date homeowners can reserve a Help to Buy property is 31st October 2022, in time for the purchase to complete before the scheme officially ends on 31st March 2023.

Am I eligible?

There are a number of conditions you must meet to be eligible for the scheme:

  • You must be aged 18 or over.
  • You must be a first-time buyer. If you are buying a property with another person, you must both be first time buyers to be eligible.
  • You need to have at least a five per cent deposit of the total cost of your home. You will need to get a mortgage to cover the portion not covered by your deposit and the equity loan.
  • The property you are buying must be a new build property registered with a help-to-buy housebuilder and the full purchase price must be under a specified amount. The maximum property purchase price is determined by region; in London it is £600,000 and £437,600 in the South East.
  • Your new home must be your only permanent residence. 

How do I apply? 

Once you have found your new home and reserved it with the homebuilder, you can submit an application for an equity loan with a Help to Buy agent. You’ll need to provide personal and financial information, such as your household income, and information about the property, deposit and your proposed repayment mortgage.

Your agent will review all the information you provide and calculate your eligibility for the scheme. If approved, you will receive an Authority to Proceed (ATP) which is valid for three months. You can then apply for your repayment mortgage and the relevant documents will be forwarded to your conveyancer.

Your agent and conveyancer will liaise to ensure the required paperwork is in place before you sign and exchange contracts. On completion your equity loan is paid straight to the homebuilder.

If you’re a first time buyer looking for a new build property in a highly desirable area of South East London, look no further than our new Cardinal Square development in Petts Wood.

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Epicho Homes