As an exceptional government program, Help to Buy gives a superb chance to first-time buyers who are hoping to purchase a home. The Help to Buy scheme permits you to get a credit for up to 20% of the property estimation. For this situation, purchasers need to post a security deposit of just 5% of the house's worth in Hertfordshire. Then they get a home loan to cover the excess expense of the home. This program was accessible to everybody. However, since the beginning of 2021, the government Help to Buy program is accessible for first-time buyers only.
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 Hertfordshire.
Help to Buy Hertfordshire includes new builds only. If you buy a home in a new residential complex, you can use the government scheme. In this case, you will receive a loan in the form of a split and will not pay additional interest for the first five years. Starting in the sixth year, you will earn 1.75% interest. These percentages increase annually. For 25 years, you need to repay the loan. If by that time you sell the property, the loan must still be compensated. To avoid paying additional interest, it is best to pay off the entire loan amount within the first five years.
However, remember that the property's actual value affects the loan amount. That is, if the price of real estate falls or rises, the Help to Buy equity loan will change accordingly. For example, if the value of your home increases by 10%, then the interest rate that must be paid will increase by 10%. Consider this if you are considering purchasing Help to Buy Hertfordshire properties.
|Example of Help to Buy in Hertfordshire|
|Cost of the home is £275,000|
|Cost name||Percentage of total||£ value|
To participate in the Hertfordshire Help to Buy program, you have to comply with the established rules.
|Region||Help to Buy price cap|
|East of England (Hertfordshire)||£407,400|
|Yorkshire and the Humber||£228,100|
If the buyer does not have the total sum to purchase the new home, then the opportunity to buy one of the Help to Buy houses in Hertfordshire through a government program seems attractive. But before deciding on this matter, you need to know more about the pros and cons of the program.
|+ Full ownership. The buyer owns 100% of the residential house.||- New build houses only. Help to Buy houses do not cover resale properties.|
|+ Small deposit. The buyer pays a deposit of only 5% of the total value of the bought house.||- Regional prices. In each region, prices are set, which should not exceed the purchased real estate.|
|+ 5-year interest-free period. The purchaser can manage to pay the price of the bought house during the first 5 years without paying interest on top at all.||- Not a fixed worth. If the housing property price rises, the purchaser pays interest on the new cost.|
|+ Family income does not matter. The acquisition of Help to Buy real estate does not provide for maximum family income restrictions.||- Rising interest. At the end of the interest-free time, the interest rate increases annually.|
|+ 25-year period to pay off the loan. You have plenty of 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.|
|+ Minimum mortgage rates.||- Reconstruction approval. Before you can start improving your apartment or house, 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:
|London||from £937 / ft2|
|Buckinghamshire||from £581 / ft2|
|Milton Keynes||from £349 / ft2|
|Essex||from £415 / ft2|
|Berkshire||from £456 / ft2|
|Surrey||from £612 / ft2|
|Kent||from £407 / ft2|
|Manchester||from £366 / ft2|
|Greater Manchester||from £334 / ft2|