The new Government-backed First Buy equity loan scheme has been designed to take the pressure off first time buyers saving for a deposit and help them buy a brand new home.
It works through a joint loan from the Government and the housebuilder of 20% of the property price, allowing buyers to put down a 5% deposit to qualify for a 75% mortgage. Over 100 homebuilders and housing associations have already signed up to the scheme and Halifax, Nationwide and Barclays have agreed to offer 75% mortgages to participants.
Loans will be free of charge for the first 5 years and repaid when the property is resold. The maximum new home value under the scheme is £280,000 but this could increase to £300,000 in exceptional circumstances. The scheme is only available if you are a first time buyer and your household income is less than £60,000.
In particular, the First Buy scheme will help young buyers who would otherwise struggle to raise the large deposit required for a mortgage or only be able to do so by seeking financial help from their parents. The first homes are expected to be available to first time buyers in September.
Start searching for your new home on SmartNewHomes today.
See Also: Property News (6701), FirstBuy (7), Equity Loan Scheme (1), First Time Buyers (15), Property Articles (28)
Date Published: 22 June 2011
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