Help to Buy is a special program designed to help first-time buyers buy homes in different parts of the country, such as Buckinghamshire. The Help to Buy scheme is supported by the government. This means that when buying a new apartment or house, buyers can apply for a loan in the amount of up to 20% of the property's value. After they make a minimum deposit of 5%, they can get a mortgage covering the remaining 75% of the home's value. In 2021, the government Help to Buy program was changed. Previously, everyone could use the program, but now only first-time buyers.
Korter provides a special filter of Buying Schemes -> Help to Buy, where you can see all the properties that support the Help to Buy scheme in Buckinghamshire.
Since only new properties are classified as Help to Buy Buckinghamshire developments, you can take advantage of a special program when buying a home in a new development. In this case, you get an interest-free loan for the first five years. Then, starting in the sixth year of living in the home, you will begin paying interest equal to 1.75% of the property's actual value. You also have 25 years to pay off the loan in full. If you sell your property before the 25-year timespan, you also need to pay off the loan. Therefore, the best advice on avoiding paying additional interest is to pay the entire amount within the first five years.
In addition, it is crucial to understand that it is the actual value of the property that affects the loan amount. If the value of the house rises or falls, Help to Buy equity loan will also rise or fall, respectively. For example, if the property price increases by 10%, then the interest rate you must pay will also increase by 10%. When considering purchasing Help to Buy Buckinghamshire properties, this must be kept in mind.
|Example of Help to Buy in Buckinghamshire|
|Cost of the home is £400,000|
|Cost name||Percentage of total||£ value|
To participate in the Buckinghamshire Help to Buy program, you have to comply with the established rules.
|Region||Help to Buy price cap|
|South East (Buckinghamshire)||£437,600|
|Yorkshire and the Humber||£228,100|
|East of England||£407,400|
If the buyer does not have all the necessary funds to purchase the new home, then the opportunity to buy one of the Help to Buy houses in Buckinghamshire through a government program might be tempting. But before opting for this program, you need to know everything about the advantages and disadvantages of the program.
|+ Complete ownership. The buyer owns 100% of the purchased apartment or home.||- New homes only. Help to Buy houses do not cover resale properties.|
|+ Deposit at a minimum. The buyer has to pay a 5% deposit of the total value of the house.||- Regional price cap. Each region features set prices, which should not exceed the purchased house.|
|+ 5-year interest-free phase. The purchaser can manage to pay the price of the house during the first 5 years without interest on top at all.||- Not a fixed cost. If the housing price rises, the purchaser pays interest on the new value.|
|+ Family revenue is not important. The purchase of Help to Buy homes does not provide for maximum family income restrictions.||- Growing interest. At the end of the interest-free period, the interest rate increases annually.|
|+ 25-year term to pay off the loan. You have enough time before you have to repay the loan in full.||- Remortgage is a problem. Many remortgage deals are only accessible to those who have paid off their loan.|
|+ Low mortgage rates.||- Reconstruction permit. Before you can start improving your property, you need to get a permit.|
If you decide to become a member of the Help to Buy program, here is a small guide on how to do it: