At the beginning of April 2021, the government will be launching their new help to buy scheme. This is to help people that are looking to buy their first home. With this scheme, you are able to borrow a minimum of 5% and up to a maximum of 20% of the property (40% in London) of the full purchase price of the property of a new build home. You must buy your home from a home builder for the help to buy property in Dorset. Each area has its own price caps and in Dorset, this is 349 thousand pounds. The percentage you borrow is based on the market value of your home when you buy it. You do not pay any interest on the equity loan for the first 5 years. You start to pay interest in year 6, on the amount you borrow from the government.
These equity loan payments interest only, so you do not reduce the amount you owe. You can repay all or part of your equity loan at any time. A part payment must be at least 10% of what your home is worth at the time of repayment. An example of this on a £200,000 property would be a 10k deposit from the homeowner which is equal to 5% of the property, then getting 40k from the government which is equal to 20% of the property and the remaining 75% comes from the mortgage lender.
In the first 5 years, all you have to pay is the £1 monthly management fee by direct debit. From year 6 you will be paying that same £1 monthly fee plus a monthly interest fee of 1.75 % of the equity loan then the interest rate will rise each year in April by the consumer price index, plus 2%. You will continue to pay the interest until you repay the loan back.
You must pay the loan back in full if you are at the end of the equity lean term; When you pay off your repayment mortgage; If you sell your home; If you don’t follow the terms set out in the equity loan contract and we ask you to pay the loan in full. When you repay the equity loan and the market value of your home rises so does the amount you will owe; But if the market value falls so does the amount you have to pay back.
Barrett Mortgages is a professional finance broker and we can help you to get onto the property ladder. With offices in Poole, Dorset we can provide you with a personalised service based on your financial circumstances. A lot of the large corporates use high-pressure sales tactics and people are getting fed up with them. We don’t use tactics like that and will make sure that any product recommended to you is in your best interest. We have a trustworthy, honest and upfront service offered by us. This has meant our business has thrived during these times when clients have needed more individual and specialist help. All of our staff are fully qualified, experienced and chosen based on their keenness to provide the best possible experience for our customers. We promise no push hard sales tactics and have built a strong reputation which is important as we rely heavily on referrals from clients.
If you are interested in help to buy properties Dorset please take a closer look on the government website. Click here!
Get in contact with us if you are interested in our advice and services.