Help to Buy Mortgage Schemes | Mortgage Advice in Bristol

Help to Buy Mortgage Schemes

Help to Buy Mortgage Advice in Bristol

Following on from the 2008 credit crunch, our government decided that they needed a backup plan, in a bid to try and kickstart the heart of the mortgage market. Their primary focus were on first time buyers, bringing in “Help to Buy Schemes” to help them get onto the property ladder.

There are lots of different ways to take out a Help to Buy in Bristol, with a variety of schemes available. Some may be more appropriate for you, others you won’t meet the criteria for. Below we have listed the Help to Buy Schemes that are available to homebuyers.

Help to Buy Equity Loan

The Help to Buy Equity Loan is the most favourably used of the available schemes, with many home buyers using this to get onto the property ladder. If you are a first time buyer in Bristol looking to make a start on your mortgage journey, this could be the perfect scheme for you!

Help to Buy Equity Loan Mortgage Advice UK | MoneymanTV

The first thing to remember is that you must be a first time buyer in Bristol, before you can qualify for this scheme to be able to qualify for this scheme. Additionally, this will only apply to new-build properties and you’ll need a minimum 5% deposit.

This scheme functions in a way where you will put down your minimum of 5%, more if you can, with the government loaning you whatever the remaining percentage is, up to a total of 25% deposit. If you put down 10%, they’ll loan you 15%, 15% then 10% and so on, until you have 25% deposit.

In the end, this will give you a 75% mortgage, as well as the government loan to pay off. You will have 5 years interest-free to pay back your loan to them. If you cannot do this in 5 years, you will start gaining interest on the remaining balance, starting at a rate of 1.75%.

As an open & honest mortgage broker in Bristol, we know that balancing your mortgage payments and the equity loan repayment consecutively can be difficult.

There are lots of different ways around this, such as a remortgage to raise capital once you’re out of your introductory period, using this to pay off that loan (though this can increase your monthly payments.)

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership Scheme was also brought in as a way of helping applicants to purchase their home as only a percentage, rather than the full house, with the remaining percentage being paid as a rental amount to a local authority.

Help to Buy Shared Ownership Mortgage Advice UK | MoneymanTV

Typically speaking you will own between 25-75% of the property you are looking to purchase, with the percentage that is remaining being owned by a local council or housing association (known as a local authority).

This mortgage schemes works in a way where you will be paying back your monthly mortgage payments, but also a rental fee per month to the local authority, which means that you are paying 100% of the ground rent and service charge on your new home (even if you own the smallest amount.)

The good news is that this rental charge will not have interest, generally making it cheaper than paying the full mortgage amount. If you come into more money as your term progresses or if your property increases in value, you can increase your shares.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy scheme was brought forward back in 2014 after the vast success of the Help to Buy Equity Loan Scheme after the credit crunch.

This government ran scheme was created with the aim to build upon the foundations of the original Help to Buy Scheme, with a view to help members of the Armed Forces get onto the property ladder.

Help to Buy Armed Forces Mortgage Advice | MoneymanTV

If you match the criteria for the Armed Forces Help to Buy Scheme, this is something that could prove to be incredibly advantageous when you are looking to get onto the property ladder as a first time buyer in Bristol.

The government has thankfully extended the deadline/review date of the scheme to December 2022 and we here at Bristolmoneyman genuinely hope it stays around, as the scheme is massively beneficial to Armed Forces members who want to buy their first home.

Bonus: Lifetime ISA

The Lifetime ISA, whilst technically not a Help to Buy Scheme, is a very helpful scheme that often slips people’s minds. It’s not high on everyone’s priority as a go-to scheme, though it could prove to be the scheme that helps you buy your home as a first time buyer in Bristol.

Lifetime ISA Mortgage Advice UK | MoneymanTV

A Lifetime ISA is pretty much a savings account where your money is able to grow, completely tax free. You are also provided with a government top-up of an additional 25%!

This means that if you can put the maximum £4,000 in savings each year, you would receive a much welcomed and rather handy £1,000 bonus amount in your savings, to use later down the line.

In order to access this type of mortgage scheme, you have to meet rather specific mortgage lending criteria, which our dedicated mortgage advisors in Bristol can discuss with you. All of the information on this scheme is available on the government Lifetime ISA website.


Last edited 09/08/2022

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