If you find it challenging to save for your mortgage deposit, consider exploring the government mortgage schemes available in Bristol.
These schemes are designed to make obtaining a mortgage more affordable.
What is a mortgage scheme?
The government aims to make homeownership more accessible in Bristol by offering a variety of mortgage schemes to assist buyers in getting onto the property ladder.
Each scheme operates differently; some help with saving for a deposit, while others help in purchasing a property.
How can I access a mortgage scheme in Bristol?
Each mortgage scheme has specific criteria that must be met to qualify.
Not everyone will be eligible for every scheme. For example, some are exclusive to first-time buyers, while others are available to both first time buyers in Bristol and existing homeowners.
List of mortgage schemes in Bristol
Here is a comprehensive list of the current government mortgage schemes available:
Shared Ownership
How does Shared Ownership work in Bristol?
One of the most popular and widely used schemes is Shared Ownership in Bristol.
Shared Ownership allows homebuyers to take out a mortgage on a share of the property, usually between 25%-75%, though sometimes as low as 10%.
You will also pay rent on the remaining share owned by the landlord or building society. Your monthly payments will consist of mortgage payments on your owned share and rent on the landlord’s share.
Shared Ownership Criteria
To be eligible for Shared Ownership in Bristol, you must meet the following criteria:
- Be at least 18 years old.
- Have an annual household income below £80,000 if residing outside of London.
- Be unable to afford a home on the open market.
- Have a good credit history.
- Have no history of mortgage or rent arrears.
Shared Ownership is primarily aimed at first time buyers in Bristol but is also accessible to existing homeowners.
Buying a Home with Shared Ownership in Bristol
Once you have qualified for the Shared Ownership Scheme, you can begin your mortgage process.
With Shared Ownership in Bristol, you will still need to find a suitable mortgage product based on your share of the property. This is where we come in!
Your mortgage advisor in Bristol will search through thousands of mortgages on your behalf to find the perfect mortgage deal for your personal and financial situation.
Once we find a tailor-made product for your Shared Ownership property, we can begin preparing your final mortgage application.
Speak to a Shared Ownership Mortgage Advisor – It’s Free!
Send a message, ask a question or arrange a callback with one our mortgage advisors.
Right to Buy
How does Right to Buy work in Bristol?
Right to Buy in Bristol helps eligible council and housing association tenants purchase their homes at a discounted rate.
Discounts can rise up to £102,400 outside of London. This discount is available if you have been a secure tenant and a public sector tenant for at least three years.
This scheme is designed to make homeownership more accessible for individuals who might not otherwise afford it.
Right to Buy Criteria
To be eligible for the Right to Buy Scheme, the following conditions must be met:
- You must have been a secure tenant for a minimum of three years. This does not need to be the last three years; for example, if you had a break in council tenancy, you might still be eligible.
- Your current accommodation should not be specifically designated for older or disabled individuals.
- You must not be facing legal issues related to debt, such as being subject to a Debt Relief Order (DRO) or having declared bankruptcy.
- There must be no outstanding possession order on your home due to rent arrears or anti-social behaviour.
Buying a Home with Right to Buy in Bristol
To start the application, tenants need to complete the Right to Buy application form (RTB1) and submit it to their landlord.
The landlord has up to four weeks (or eight weeks if the tenancy has been for less than three years) to respond and confirm eligibility.
If the application is approved, the landlord will send an offer notice detailing the property’s market value, the discount applied, and the price at which it can be bought. Tenants typically have 12 weeks to decide whether to proceed with the purchase.
During this period, it is advisable to speak with a mortgage advisor to arrange your Right to Buy mortgage in Bristol. Once all preparations are complete, tenants can proceed to complete the purchase, becoming homeowners under the Right to Buy Scheme.
Have a Question About Right to Buy Mortgages?
Send a message, ask a question or arrange a callback with one our mortgage advisors.
Mortgage Guarantee Scheme
How does the Mortgage Guarantee Scheme work in Bristol?
The Mortgage Guarantee Scheme is a government-backed initiative that enables homebuyers to purchase with a 5% deposit.
Taking out a mortgage with a 5% deposit allows homebuyers to access a 95% LTV Mortgage.
The scheme is accessible to both first time buyers in Bristol and existing homeowners, making property ownership more accessible and enabling a wider range of individuals to step onto the property ladder.
Mortgage Guarantee Scheme Criteria
To be eligible for the Mortgage Guarantee Scheme, you must meet the following criteria:
- The scheme is available to both first-time buyers and current homeowners seeking to move.
- The property you wish to purchase must have a value not exceeding £600,000, whether it is a new build or an existing property.
- A deposit of at least 5% but less than 20% of the property’s purchase price is required.
- The property must be a residential home located in the UK. Buy-to-let properties and second homes do not qualify under this scheme.
- Only repayment mortgages are eligible.
- You must meet the lender’s credit check criteria.
Buying a Home with the Mortgage Guarantee Scheme in Bristol
The Mortgage Guarantee Scheme is designed to help individuals purchase a home with a smaller deposit, making homeownership more attainable.
The process begins by finding a suitable property within the UK, ensuring it does not exceed the £600,000 limit set by the scheme. Once you have found a property you want to make an offer on, the next step is to secure a mortgage. You will need to ensure that you have a deposit of at least 5% of the property’s value.
Next, you must prepare your mortgage application. The simplest way to do this is through a mortgage broker. They will arrange your mortgage and complete your application for you, ensuring a smooth process.
You will then undergo a thorough credit check and assess your financial situation to ensure you meet the criteria. If approved, the government provides a guarantee to the lender for a portion of the mortgage, reducing the lender’s risk and encouraging them to offer loans to those with smaller deposits.
Once the mortgage is secured, a mortgage broker in Bristol can then proceed with the usual steps of purchasing a home, such as hiring a solicitor, conducting surveys, and finalising the purchase.
Have a 5% Deposit?
If you have a 5% deposit, you may be eligible for a mortgage under the Mortgage Guarantee Scheme.
Lifetime ISA
How does the Lifetime ISA work in Bristol?
The Lifetime ISA, also known as LISA, is a type of savings account where individuals can save for their first home or retirement.
In each tax year, you can save up to £4,000 in your Lifetime ISA. This cap is in place because the government tops up your savings by 25% each year. Thus, if you maximise your contributions at £4,000, the government will generously add an additional £1,000 to your account.
Even if you do not manage to reach the savings cap, the government will still provide a 25% bonus on what you’ve managed to save.
If you are struggling to save for your first mortgage in Bristol, this scheme is perfect for you!
Lifetime ISA Criteria
To open a Lifetime ISA account, you need to meet the criteria before you qualify:
- You must be aged between 18 and 39 years old to open a Lifetime ISA, with the option to contribute to your Lifetime ISA until the age of 50.
- You must be a resident of the United Kingdom.
- Funds from your Lifetime ISA can only be utilised for purchasing your first home or for later-in-life savings.
- The property’s value intended for purchase must not exceed £450,000.
- Your Lifetime ISA account must be active for a minimum of 12 months before you can access the funds for your first home purchase.
- You must be purchasing with a mortgage.
- You must use a conveyancer and solicitor to represent you in the purchase process.
Buying a Home with the Lifetime ISA in Bristol
Once you have saved enough for your deposit, it is important to know that you should not withdraw from your Lifetime ISA.
Withdrawing at any point from the Lifetime ISA will result in a 25% withdrawal fee. If you want to use the funds to buy your first home, you need to contact the bank where your LISA account is held, and they can arrange for the funds to be released.
When speaking with a mortgage broker in Bristol, they can liaise with the bank on your behalf if this is something that you need help with. Once the bank has accepted your withdrawal request, we can begin finding the perfect mortgage for your personal and financial situation.
Got Your Lifetime ISA Savings Ready?
If you have your LISA savings ready and need help finding the perfect mortgage for your new home, we’re here to help.
Forces Help to Buy
How does the Forces Help to Buy Scheme work in Bristol?
The Forces Help to Buy Scheme is a government-backed initiative designed to help armed forces members purchase their first home or move to a new property.
The Forces Help to Buy Scheme offers service members in Bristol an interest-free loan of up to 50% of their annual salary, capped at £25,000. This loan can be utilised for covering a deposit and related expenses associated with purchasing a home.
The scheme is only accessible to regular service personnel who have served for at least 12 months. The loan is repaid over a 10-year period through payroll deductions.
The funds acquired through this scheme can be employed for various purposes, including buying a new home, relocating closer to the place of work, adapting a residence for medical requirements, or extending a property to accommodate changing family needs.
Forces Help to Buy Criteria
The Forces Help to Buy Scheme is available to personnel who:
- Currently serve in the British Army, Royal Navy, or Royal Air Force.
- Have completed the required length of service.
- Are not reservists or members of the Military Provost Guard Service.
- Meet the necessary medical criteria.
- Have at least six months of service remaining at the time of application.
Buying a Home with the Forces Help to Buy in Bristol
Buying a home through the Forces Help to Buy Scheme involves a straightforward process designed to assist military personnel in achieving homeownership.
Eligible service members can apply for an interest-free loan of up to 50% of their annual salary, capped at £25,000, to cover a deposit and associated expenses.
To begin the process, applicants must ensure they meet the eligibility criteria. Once eligibility is confirmed, service members can apply for the loan.
The application typically involves providing documentation to verify service history and financial status.
Upon approval, the loan is repaid over ten years through payroll deductions. This scheme offers military personnel a valuable opportunity to take significant steps towards homeownership, providing financial support and guidance throughout the process.
Have a Question for Our Mortgage Advisors?
If are looking to utilise any of these schemes and want further advice from an expert, don’t hesitate to get in touch.
Mortgage Schemes Advice in Bristol
If you want further clarification on any of the schemes mentioned above, make sure to reach out to our mortgage advisors in Bristol.
We have been helping homebuyers in Bristol achieve their mortgage goals for over 20 years! Having come across thousands of different mortgage scenarios, we are confident that we will be able to help you through your mortgage journey.
Book a free mortgage appointment online and speak to our mortgage advisors in Bristol about your situation and mortgage goals today.
Date Last Edited: October 4, 2024
