Neil Wright Estate AgentsHouses for Sale in the Settle – Bentham – Yorkshire Dales

Government Help To Buy Scheme

Help to Buy

The second phase of the Government’s Help To Buy scheme is being introduced next week- 3 month’s earlier than planned.

The mortgage guarantees were due to start in January 2014, but the government have brought this forward to the 7th October. The mortgages, available from several high street banks, will range from 80% to 95% of the value of a property. It means buyers need just a 5% deposit, helping those who cannot afford a larger deposit get on the property ladder or those already on it to move home. it will apply to those buying new or existing homes up to a maximum value of £600,000. 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. Figures show mortgage lending remains at half the level it was before the credit crisis, despite mortgage rates being at their lowest level for five years. The Help to Buy scheme was announced by the Chancellor in this year’s budget and has two parts. Equity Loan and Mortgage Guarantee.

Under the equity loan scheme, the Government provides a loan of up to 20% of the value of a new build home, interest free for the first five years. The Help to Buy mortgage guarantee scheme will be available for three years up to January 2017.

Every September the Government and the Bank of England Financial Policy Committee will review the impact of the scheme and examine whether the fees or the price cap should be adjusted. If any future Government proposed to extend the scheme beyond its three year life the FPC would need to agree.New Picture

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