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How to get onto the property ladder

First-time buyers often struggle to get onto the property ladder, especially when they also have to pay rent and bills. Saving for a deposit while house prices continue to rise can be a daunting task. However, there are a number of schemes available to help first-time buyers, although you may want to speak to a CeMAP qualified mortgage advisor to help you decide.

The Help to Buy scheme was originally introduced in 2013, and since then has changed slightly. You still require a 5% deposit, and the government will provide a further 20% interest free. This means that you only have to borrow 75% for your mortgage, providing access to lower interest rate deals. However, in year six following the house purchase, you will pay a loan fee, which is 1.75%. This fee increases every year, and will not count towards paying off the amount borrowed. At the end of the mortgage term, or when you sell your home (whichever is sooner) you will have to pay the government 20% of its value, even if it is at a loss.

If you are aged between 23 and 40, you may be able to take part in the Starter Homes scheme. According to the criteria, you must not currently own your own home, or have previously owned a property. The homes will be available with at least a 20% discount on the market value. However, you won’t be able to sell at the full market value, or rent out, until after five years.

There are other schemes available, which a mortgage advisor will be able to tell you about.

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