Help to Buy is a particular government program that helps first-time buyers purchase a home. When using the Help to Buy scheme and buying another private property in Kent, purchasers can get an advance in how much up to 20% of the house's worth. Likewise, they should post a security deposit of 5% and get a home loan, covering the excess 75% of the cost of the property. In 2021 a few changes were made to the government Help to Buy program. It was accessible to any individual beforehand, and presently only first-time buyers can apply for this advantage.
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 Kent.
To use this profitable program, you need to remember that only new buildings belong to Help to Buy Kent properties. If your desired housing meets this criterion, you can get an interest-free loan for the first five years. After the end of this period, you will be charged an interest of 1.75%. Starting from the 6th year, the interest rate increases every year. There are 25 years to repay the loan fully. If the owner sells the home by then, he still has to pay off the loan. Thus, if you manage to pay off the entire loan within the first five years, you can avoid additional interest.
However, the actual cost of housing directly affects the size of the loan amount. So, what happens if property costs rise or fall? Your Help to Buy equity loan will grow or fall as well because it is tied to the price of your home. For example, if the house costs 10% more, you will have to pay 10% more. This fact must be considered when buying Help to Buy Kent properties.
|Example of Help to Buy in Kent|
|Cost of the home is £200,000|
|Cost name||Percentage of total||£ value|
To participate in the Kent Help to Buy program, you have to comply with the established rules.
|Region||Help to Buy price cap|
|South East (Kent)||£437,600|
|Yorkshire and the Humber||£228,100|
|East of England||£407,400|
If the purchaser does not have the total amount of money to purchase a new home, then the opportunity to buy one of the Help to Buy houses in Kent through a government program seems enticing. But before deciding on this step, you need to know everything about the advantages and disadvantages of the Help to Buy scheme.
|+ Complete ownership. The buyer owns 100% of the housing.||- New homes only. Help to Buy houses do not cover resale properties.|
|+ Minimum deposit. The buyer must pay a deposit of just 5% of the full price of the house.||- Regional costs. Each region provides set costs, which should not exceed the bought home.|
|+ 5-year interest-free time. The buyer can manage to pay the value of the house during the first five years, not paying interest on top at all.||- Not a fixed sum. If the home price rises, the buyer pays interest on the new value.|
|+ Family earnings are not essential. The purchase of Help to Buy real estate 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 sufficient time before you have to repay the loan in full.||- Remortgage is an issue. A significant number of remortgage deals are only available to those who have paid off their loan.|
|+ Low mortgage rates.||- Renovation permit. 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: