Help to Buy

There are two main Help to Buy Schemes in the UK at the moment; an Equity Loan and a Mortgage Guarantee. A Help To Buy Equity Loan is for people that wish to buy a new build property that they wouldn't otherwise be able to afford in their area due to not having a sufficient income and/or deposit to secure the level of mortgage needed.

Am I Eligible?

DWG will assess you, your long term goals and situation to decide which help to buy scheme might be suitable for you. There are a few restrictions on these schemes, and considering these schemes are for first time buyers, the process can be quite daunting and confusing. DWG help establish what scheme is right for you and the steps to take to qualify, always making sure you are in the know and breaking everything down, jargon-free. We can explain and walk you through right to the end, whilst using our expertise to make sure you are getting the best deal possible.

An Example of the Equity Loan Help to Buy Scheme

You wanted to purchase a home for £200,000. You would put down a 5% cash deposit, which would be £10,000. The Government would then put in 20% towards your loan, which would be £40,000. You would then be left with a 75% mortgage from the lender, which would be £150,000. If you come to sell the house, and it goes up in price to £250,000, creating £50,000 ‘profit’, you would get £200,000 (£150,000 from the mortgage, £10,000 from cash deposit and £40,000 as 80% share of the ‘profit’) You would then pay back £50,000 to the government (the original 20% borrowed at £40,000 plus 20% share of the profit at £10,000). If there was anything outstanding on the mortgage, you would have to pay it back from your share. This scheme is now only open to first time buyers on new build properties.

An Example of the Mortgage Guarantee Help to Buy Scheme

You wanted to purchase a home for £200,000. You would put down a 5% cash deposit, which would be £10,000. You would then be left with a 95% mortgage from the lender, which would be £190,000. The increased proportion of the mortgage being offered by the lender is backed by the government guarantee scheme in the event of repossession.

The scheme is designed to help creditworthy households struggling to save for the higher mortgage deposits required by lenders in the current environment. For this reason, a mortgage eligible for a guarantee under the scheme will need to:

be a residential mortgage (not second homes) and not buy-to-let
• be taken out by an individual or individuals rather than an incorporated company
• be on a property in the UK with purchase value of £600,000 or less
• have a loan-to-value of between 91 per cent and 95 per cent
• be originated between the dates specified by the scheme
• be a repayment mortgage and not interest-only and
• meet standard requirements in terms of the assessment of the borrower’s ability to pay the mortgage, for example a loan-to-income and credit score test

The benefit of this scheme is that you would own the property fully, therefore you would accrue any appreciation on it and repay as you would with any other mortgage.

Whichever scheme you choose to go with, DWG makes the whole process straightforward and easy for you, so you can focus on the important things.