Your home may be repossessed if you do not keep up repayments on your mortgage.
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The Help to Buy scheme 2014 is designed to help buyers that don't have a large deposit get onto the property ladder.
Thanks to the schemes, you can get government help to buy a house provided you've got at least a 5% deposit. This guide explains what each scheme means for homebuyers, and what you need to do to apply.
The first part of Help to Buy was rolled out in April 2013, offering interest free loans to help buyers boost their own 5%+ deposit.
Help to Buy equity loans are only available for new-build homes from registered developers. You can apply for Help to Buy mortgages to move house or as a first time buyer:
With a deposit of at least 5% plus a loan of up to 20%, you can compare mortgages from 75% LTV and up. If your own deposit is higher you'll have access to even more mortgages.
Once you've chosen a property and a Help to Buy mortgage, simply apply directly to the lender and state what loan you'll need.
Remember to compare Help to Buy mortgages with standard mortgage deals to make sure they are the cheapest option for you.
The second part of the government Help to Buy scheme guarantees the lenders' risk, rather than boosting your finances.
The government hopes its Help to Buy scheme will encourage lenders to offer a new range of high LTV mortgages. To find out which providers are already in the scheme you can visit the HelpToBuy.org website.
The scheme offers:
If you can't pay the government will compensate the lender, not you, and your home could still be repossessed.
Under the Help to Buy mortgage guarantee scheme, you can only get a 95% mortgage if you have a 5% deposit. If you have a 10% deposit you can only choose a 90% mortgage or higher.
Simply compare mortgages offered via the government mortgage guarantee scheme 2014 and apply as you would for any other mortgage - the guarantee doesn't come into effect unless you default.
Both parts of the Help to Buy scheme are open to anyone 18+ years old including the self-employed. However, lenders will still take your finances into account when deciding whether to offer you their mortgages.
This means if you have a poor credit history or you are only recently self-employed (i.e. you don't have extensive accounts as proof of income) then you will still find it difficult to get a Help to Buy mortgage.
Help to Buy first time buyers should be able to take out either type of mortgage provided they meet the lender's affordability criteria. All prospective buyers must intend to live in the property full time (they're not available for second homes).
Another part of the government's Help to Buy initiative is the NewBuy scheme. This allows you to buy a newly built home with a deposit of just a 5%.
To be eligible for new buy mortgages, you must be either a UK citizen or have the right to remain indefinitely in the UK. The scheme is open to homeowners as well as first time buyers; but while there's no limit on your income, lenders will still assess your ability to pay down the loan.
Additionally, the homes covered by the scheme must be:
You can apply for the Help to Buy: NewBuy scheme through an approved lender. To find out more about the scheme, and to find NewBuy homes in your area, visit the Gov.UK website.
The same Help to Buy government scheme will operate across England and Northern Ireland, while Wales has yet to announce its mortgage schemes. Help to Buy Scotland differs, with the maximum property value set lower at £400,000. In addition your combined deposit and equity loan must total at least 80% of the total price, and the loan can be repaid at any time.
The first thing to do is identify which tranche of Help to Buy mortgages best fit your needs, then look for the best mortgage listed within that scheme.
For example, if you can only afford the mortgage repayments on a 80% LTV mortgage you may have to get an Help to Buy equity loan to boost your deposit (in turn, restricting your house hunt to new-builds only). If the home you want to buy isn't a new-build, your only option will be Help to Buy 2.
Once you know which type, use our dedicated Help to Buy mortgage comparison table to compare Help to Buy mortgages for the home of your dreams. You'll still need to choose fixed or tracker and check the rates, fees and terms to get the best Help to Buy deal.
Finally, once you've chosen which Help to Buy mortgage you want to apply for simply approach that lender to get the ball rolling.
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