Help to Buy 2021 - 5% Deposit

Help to Buy Scheme 2021

Mortgage Chain

First Time Buyer Mortgages

Alex Kerr: Mortgage Broker for First Time Buyers

Mortgage Chain are Mortgage Brokers for First Time Buyer Mortgages and have helped many first time buyers onto the property ladder, using the Help to Buy Scheme.

Today we look at the fundamental changes to the Help to Buy Scheme 2021.

What is a Help to Buy Equity Loan ?

The new help to buy scheme 2021 equity loan is a help to buy equity loan secured on your property. There is no interest to pay for the first five years, and from year six you will start paying back interest. You can only purchase a new build property and there are advantages and disadvantages to the scheme.

Main advantage

An advantage being you would generally get better access to mortgage rates and the equity loan contributes towards your overall deposit, meaning more options.

Main Disadvantage

On the drawback side you will need to pay it back to help to buy the equity loan amount you borrowed, plus a percentage of the equity that you make in equity. e.g. (based on a 20% equity loan) You make £50,000 in equity and then sell the property, you would need to pay back the equity loan, plus 20% of the equity you made since taking out the scheme:

= Equity loan + £10,000

You will see the Help to Buy logo on the properties that you are looking to buy, that support the scheme, when searching for properties online. Full details can be found here – Help to Buy Scheme

The current Help to Buy Scheme Closes for Applications on December 15th 2020

The current help to buy equity loan scheme closes its doors to new applications on 15th December, with a build completion date of February 28th 2021, and a move in date by 31st March 2021. But what happens after that ?

Help to Buy Scheme 2021

The new help to buy scheme 2021 does actually open doors to new applications from the 16th of December 2021, and the previous help to buy scheme 2020 shuts it’s doors completely on December 15th 2020.

So what’s the difference ? what are the new rules ?

First Time Buyers Only

The new help to Buy scheme 2021 will be for first time buyers only. This means if you ever owned a property in any part of the world, it would rule you out for the scheme. If you’re doing a joint application you must both be first time buyers.

Regional Price Caps

On top of this help to buy 2021 are applying regional price caps, which means you can’t buy a help to buy property within a certain area, above the maximum price set by help to buy.  This link provides full details of the regional help to buy price caps for 2021.

Help to buy 2021 Scheme – Please see below our YouTube Video on the Help to buy Scheme 2021

If you are looking to apply for help to buy equity loan, there’s a couple of ways you can go about this. It does depend on which area you are in and which area you are applying for.

Property Information Form (PIF)

It’s either a paper-based application, which is known as a Property Information Form (PIF). Some areas now provide an option to complete everything online. To apply, simply go to https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/ and hover over your area on the map, and select the link to take you to your area’s website.

Paper based & Online

You can then see if you need to fill out a paper based PIF or complete the form online. When completing the form online, you will need to upload all of the requested documents. You will be able to see your progress through an online portal. If you find a mortgage broker, they will be able to do your property information form on your behalf.

Summary

To summarise, there are two major changes to the new help to buy scheme 2021. Firstly it is available for first time buyers only, meaning if you have ever owner a property anywhere in the world, you can not apply. Secondly there are regional price caps set for each region of the country.

This means you can not buy a property above the value of the price cap set for that region. There will be some other changes but these are the fundamental ones you need to be aware of first. I have put a link to the price caps along with the help to buy guide, that you can download, below.

> Help to buy equity loan scheme regional price caps

> Help to buy home buyer guide

I definitely feel the new new Help to buy Scheme 2021 changes will help first time buyers on lower incomes, as it means first time buyers with higher incomes looking for properties over the regional price caps will need to find alternative options.

If you are thinking about the new help to buy loan scheme 2021 please let me know in the comments below. As mortgage brokers for first time buyers who specialise in the help to buy scheme 2021, we would love to hear your thoughts. Has the scheme helped you ?

Thank you for checking out today’s blog for first time buyers, please be sure to check out next weeks.

Today’s Question: Are you thinking about using the new help to buy scheme 2021? LMK!

Alex Kerr
Mortgage Broker for First Time Buyers


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DISCLAIMER: This video and description contain affiliate links via the above checkmyfile link, which means that if you click on one of the product links and purchase the product, I’ll receive a small commission. This helps support the blog and allows us to continue to make more like this. Thank you for the support!

If you would like to speak to a Mortgage Brokers for First Time Buyers please get in touch or comment below, or if you prefer book a free, no obligation Analysis Call below.

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Speak soon

Alex Kerr
Mortgage Broker for First Time Buyers

Direct Line: 03333 44 68 69

Enquiry: https://www.mortgagechain.co.uk/contact-us/

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