Schemes which can help a first time buyer

January 31, 2017 by Brendan O'Neill

Borrowers

First time buyers are now finding it harder than ever to save up for a deposit on a home, especially as house prices continue to soar. However, there are government schemes which may help to make it easier to buy a new home.

Although the government’s Help to Buy scheme ended in 2016, it did result in lenders offering a range of mortgages suitable for those with a smaller deposit. The number of small deposit products available has increased by around four times, meaning that it is possible to obtain a mortgage with a smaller deposit.

The Help to Buy scheme consisted of two parts; the mortgage guarantee, which ended last year, and the equity loan, which is still available. Buyers must have a 5% deposit available and the government will offer another 20% as an interest free loan. However, if the loan isn’t repaid within five years, interest will become payable on the amount outstanding. Buyers who live in the capital can also benefit from the scheme, although it is known as the Help to Buy London.

The government also launched the Help to Buy ISA, although this can’t be used to fund the deposit on a home. For every £200 saved by the buyer, the government will contribute £50, up to a maximum of £3,000 bonus.

There are other forms of help available, which a first time buyer may be interested in. A mortgage adviser learns about incentive schemes and other forms of help when studying on a CeMAP course.