Help to Buy scheme 2022: When is the deadline and how can I apply?
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Britons who want to buy a house under the Government’s Help to Buy scheme have just over three months to apply to make the submission deadline in October. With skyrocketing house prices posing more of a challenge for those with ambitions to jump on the property ladder, the scheme works as an equity loan to help first-time buyers purchase a new-build home.
Launched in 2013, the scheme has been credited – and criticised – for both helping thousands and costing thousands.
After taking various forms over the years, the most recent iteration allows successful applicants to borrow up to 20 percent of their property’s purchase price interest-free for the first five years, while those hoping to buy in London can borrow up to 40 percent.
However, the Government recently announced the scheme will draw to a close in March 2023, meaning first-time buyers only have until 6pm on October 31, 2022, to reserve a property and submit their application.
Claire Flynn, mortgage expert at money.co.uk said: “Given the cost of living crisis and stretched finances for many, this could be seen as worrying news.
“However, if you start your application now, you can still make the deadline.”
If the Help to Buy scheme and its respective financial implications work for you, read on to find out how to apply, what it entails, and tricks to save for a mortgage from money.co.uk.
How to apply for the Help to Buy scheme
When applying for the scheme, the first thing you need to do is check your eligibility. Applicants must be:
- 18 or over
- A first-time buyer
- Able to afford the fees and interest payments
Ms Flynn said: “It’s also worth noting that if you’re planning on living with a partner, regardless of your marital status, you must make a joint application.”
The next step is to check if your property is eligible. Your property must be a new build, must not have previously been lived in, and needs to be sold by a registered Help to Buy homebuilder.
Ms Flynn said: “There is also a maximum property purchase limit, which depends on your location.
“For example, homes in the West Midlands are eligible up to a property value of £255,600, whereas in London this can be up to £600,000.
“You should also be aware that you will still need to make repayments on your equity loan once you’ve made your purchase. Plus, after the initial five years, you will start paying interest.”
Once you’ve completed these steps, you’ll need to contact your local Help to Buy agent.
How much money do I need to contribute?
While the Help to Buy scheme can be a great way to reduce the pressure of your mortgage, you will still need to put down at least a five percent deposit on your property.
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Fortunately, there are a few quick tricks you can do to help boost your deposit savings.
Ms Flynn said: “When it comes to saving for a deposit, keep your savings in a separate account. The right account can boost your deposit fund because it will pay more interest if it has a higher rate”
Regular savings accounts often have some of the highest interest rates as long as you contribute a set amount each month, while fixed rate savings accounts guarantee interest rates for a period of three months to seven years.
Next, it’s important to work out just how much you’ll need to save to get on the ladder.
Ms Flynn said: “A 10 percent deposit will give you a wide choice of mortgage providers, whereas a five percent mortgage means you can put down less money up front, but the interest rate will be higher.”
However, while saving for a property, it’s key to remember the deposit won’t be the only large expense.
Ms Flynn said: “Legal fees, mortgage fees, the cost of furnishing your home and more can add thousands to the real-world cost of your property, so make sure you have some extra cash put aside beyond your deposit.”
To compare a range of mortgages from different providers, click here.
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