We’d like to introduce Michelle Morrison, the senior mortgage advisor at Revive Mortgages in Monton.
Michelle will be joining SalfordOnline.com as a resident housing and mortgage expert, taking you through everything you need to know when you’re thinking about buying a home.
House prices in the North West have risen by 3.7% over the past year, so there’s no better time to stop pouring your money down the renting black hole and start planning for your future.
The first thing to consider is the government scheme Help to Buy.
What is it?
The government says that Help to Buy will assist people trying to get on the housing ladder who can afford mortgage repayments but are struggling to raise a deposit.
It’s aimed at first-time buyers who can’t afford to buy a property without some help.
Mortgages where you don’t need to put down any deposit, called 100% mortgages, don’t really exist any more.
In today’s market you’ll need a deposit of at least 5% of a property’s value to get a mortgage.
A lender, like a bank or building society, will then lend you 95% of the property’s value, which you pay back to them over time. These are your mortgage payments and are usually monthly.
So if your dream home costs £100,000, you’ll need to put forward a deposit of £5,000 and borrow £95,000 from a lender.
But many people will still struggle to afford this, and that’s where Help to Buy comes in.
Help to Buy comes in two parts: an Equity loan, and a Mortgage Guarantee.
The first part, the Equity Loan, has been available since April 1 2013 and has now been extended up to 2020.
Help to Buy: Equity loan
With a Help to Buy Equity loan the Government lends you up to 20% of the cost of your new build home, so you’ll only need that 5% cash deposit and a 75% mortgage to make up the rest.
It’s open to first time buyers and people looking to move up the housing ladder, but is restricted to new-build homes.
You, the buyer, only have to put forward as a deposit 5% of the value of the property you want to buy.
The Government steps in to loan you 20% of the value of the property.
That gives you a combined deposit of 25% – giving you access to more attractive mortgage rates.
You also won’t be charged fees on the Government’s 20% loan for the first 5 years of owning your home. It’s interest free. In year six, you’ll be charged 1.75%, increasing at a rate of 1%, plus any increase in inflation, for all the years after that.
It is available for properties sold for up to £600,000 in the UK.
Help to Buy: Mortgage Guarantee
The Help to Buy Mortgage Guarantee was brought into force in October 2013 and is due to end on December 31 2016.
Unlike the Equity Loan, this part of Help to Buy relates to both new build and exisiting properties.
You, the buyer, only need to put forward 5% of the cost of the property you want to buy.
The Government then provides a guarantee to the mortgage lender, like the bank or building society, for up to 15% of the cost of the property.
If you default on your payments, the Government will cover that 15% of the loan, so the lender can offer the buyer larger mortgages at lower rates, because they’re satisfied the money will be repaid with that Government guarantee.
It is available for properties sold for up to £600,000 in the UK.
What should I do next?
There’s lots to think about when you’re thinking of buying a new home.
These are ways to save you money and get you on the housing ladder as soon as possible.
If you’ve got any questions about the Help to Buy scheme, whether you qualify, or even how to start thinking about buying a home, contact Michelle Morrison at Revive Mortgages on 0161 850 9501.
You can find Revive Mortgages on Facebook here and get all the latest updates on Twitter here.
This is a sponsored post on behalf of Revive Mortgages
