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Help To Buy Mortgage Schemes

March 17, 2016

The government announce in the 2013 budget that they were to launch a new scheme to help the housing market. Help to Buy Mortgage Schemes comes in 2 parts – “Equity Loan” and “Mortgage Guarantee”.

The “Mortgage Guarantee” part of the Scheme will not be available until January 2014 and the provisions have yet to be finalised.

The intention of the Guaranteed mortgage is for the Government to give a guarantee to lenders who in turn will provide mortgages where the loan to value ratio is high i.e where there is only a small deposit available.

The Guarantee will cover some of the loss suffered by the mortgage lender should the property be re-possessed and, because of the high loan to value, cannot be sold for sufficient monies to pay off the mortgage. The Guarantee does not guarantee the borrowers’ monthly instalments and the borrower will still have to satisfy the mortgage lenders’ criteria.

Anyone with less than a 20% deposit will be able to apply when the scheme is up and running next year but details of how to apply have still to be released.

This Scheme will not only help get First Time Buyers on the property ladder but will also assist those home owners who want to move up the property ladder but are currently not able to as they do not have sufficient equity in their existing property.

 

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