As well as the Mortgage Guarantee, Help to Buy also covers a number of other options including those where you part rent and part buy your home, or where you share the equity in your home:
Shared ownership schemes
Shared ownership is a part-buy/part-rent scheme that enables you to buy a percentage of a newly built or resale property, usually from a housing association, and pay rent on the remaining percentage.
After one year of ownership, you are able to buy additional shares in increments of 10%, until you own 100% of your home. This process is called 'Staircasing'.
Shared ownership is especially appealing if you are unable to:
- Raise a sufficient deposit to allow a mortgage to be approved: or,
- Obtain an inadequate mortgage approval to purchase a property outright even if you have a healthy deposit.
Help to Buy Shared ownership - New build
Under this scheme, you need to purchase the maximum share that you can afford, which is normally a share of between 25% to 75% of the full market value of a property. The combined monthly cost of your rent and your mortgage will usually be less than buying the property outright.
Shared ownership - Resales
Resales are shared ownership homes that become available when existing 'shared owners' wish to sell their stake in their property. This normally happens when people move up the property ladder.
The share that can be purchased, and the rent payable, will be different for each property and will depend on the percentage initially purchased and the amount of staircasing that has taken place.
Help to Buy equity loans
With a Help to Buy equity loan, the government loans you up to 20% of the cost of a new-build home, so you only need a 5% deposit and a 75% mortgage to make up the rest.
Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. You cannot sublet your home, and you must not own any other property at the time of purchasing your Help to Buy Equity Loan home. Part Exchange deals are also not approved.
For advice on whether you qualify and what the best option for you, help is available from Bedfordshire Pilgrims who cover Surrey www.helptobuyese.org.uk or call 03333 214044.
The government has appointed a number of Help to Buy Agents throughout England to help those who are seeking to live in specific areas so if you wish to look at opportunities in areas outside of Surrey you can find who covers that area at www.helptobuy.org.uk