It has just been reported that the Help to Buy Scheme has now helped a staggering 1 million people purchase a new home. But how could it help you buy a new home?
What is the Help to Buy Scheme?
The Help to Buy Scheme has been in place since April 2013. With a Help to Buy: Equity Loan, the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
This helps first time buyers or homeowners onto the ladder with a smaller deposit.
However, there are certain criteria you must abide by to qualify. The criteria being, that the home you are going to buy is a newly built home with a price of up to £600,000.00. You must also not own any other property at the time to buy your new home with the Help to Buy Scheme.
Is the Help to Buy ISA Different?
The Help to Buy ISA is different and is a great incentive to help you save for your new home – with free money from the government as you save.
The Help to Buy ISA will boost your savings by up to 25%. For every £200.00 you save, you will receive a government bonus of £50.00. The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy: ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that; you need to have saved £12,000.
Even better, if you and your partner are saving for your first home together you can both save the maximum ISA allowance meaning a total of £6000.00 if you both save the maximum of £12,000.00 each.
When you are ready to purchase your new home you will need to instruct your solicitor/conveyancer to apply for your bonus. This can then be added towards your house purchase.
The government have indicated that over £868,000.00 Help to Buy Isa’s have been opened. This could be the kick-start onto the property ladder that you’ve been waiting for.
For further information please contact our Conveyancing solicitors at John Fowlers.