The first phase of Help to Buy - The Help to Buy Equity small payday loans for bad credit Scheme for New Homes - has been available since April 2013.
What is the Mortgage Guarantee?
It means that buyers with only 5% deposit will be able to apply for mortgages although they will not be able to actually get the loans for bad credit not payday (
https://t2conline.com/fight-unexpected-financial-crisis-by-opting-for-the-best-strategy-online-installment-loans/ ) through until January 1 2014 onwards. The mortgages, available from several high street banks, will range from 80 percent to 95 percent of the value of a property.
Who is eligible for the scheme?
· It will apply to those buying new or existing homes up to a maximum of £600,000.
· It is available to all home movers (e.g. trapped sellers, those looking to sell and buy, and first time buyers).
· The purchaser requires 5% deposit.
· British citizens only.
· Only repayment mortgages will be offered under the scheme. Tough checks will be imposed by lenders to ensure buyers can afford their mortgage payments, and borrowers' income will be verified.
· The new mortgages will not be available to people with bad credit history.
· It must be the buyers only home. It cannot be used for buy to let, or for a holiday home.
How does it work?
The government guarantees between 5 and 20% of the mortgage, so if the purchaser misses mortgage payments, the lenders' liability is reduced. This will encourage the lenders to offer higher loan to value products, such as 95% mortgages at more competitive interest rates.
How do buyers apply for a mortgage under this scheme?
You will apply for a mortgage in exactly the same way as you would for any other mortgage. There will be no extra paperwork or mortgage guarantee fees. Tough checks will be imposed, however, by the lenders to ensure buyers can afford their mortgage payments, and borrowers' income will be verified. Documents include up to a year's worth of bank statements, three month pay slips, a passport, a utility bill to prove their address, and proof of deposit.
Which lenders will be part of the Help to Buy Scheme?
According to the prime minister at the weekend, mortgage lenders signed up to the scheme (which is due to last for three years) include a number of high street banks.
How is this different from the Equity personal loans for people with bad credit not payday loans Help to Buy Scheme?
The scheme will give buyers access to up to 95% loan to value repayment mortgages on all resale and new build properties up to the value of £600,000. The buyer will own 100% of the property. The Equity Loan scheme was just for new builds and was an equity loan, meaning that the buyer only ever owned 80% of the property.
How will Help to Buy Mortgage Guarantee affect the housing market?
It is estimated that the scheme could generate an extra 400,000 house sales in just three years. An increase in lending confidence will attract more first time buyers and existing home owners to move. Click here for an opinion on how Help to Buy may affect the housing market.
Michael Tuck Estate Agents are an established estate agent, with over 13 years experience in providing an affordable and professional service in property sales and lettings. For more information or to get in touch, please contact our estate agency office.