Help To Buy Eligibility

what is help to buy eligibility, how to discover help to buy eligibility, who can get help to buy eligibility

How Can Help To Buy Eligibility Benefit You?

If you are looking for an affordable way to own your very first home, the government’s Help to Buy scheme can help! However, you must first check if you can meet the Help to Buy eligibility requirements; doing so will make your application much more straightforward.

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Help to Buy allows you to apply for an equity loan to decrease the amount you will need to borrow on a mortgage.

With help from the government, you can climb up the housing ladder in no time. Whether you are a first-time buyer or an existing home mover, you might be someone who is eligible for the Help to Buy scheme. With the Help To Buy scheme, the minimum required deposit is only 5 per cent of the property’s total value, so you won’t have to raise a considerable sum to get on the housing ladder!

Age also likely won’t be an issue as you can apply for Help to Buy schemes from 18 years old. These affordable government schemes can help you to purchase your first home early in life.

Applying For A Loan

One of the more significant Help to Buy eligibility requirements is the offer of a mortgage from a mortgage lender which will pay for the rest of your home.

Here is how it works:

  • You will have to raise 5 per cent of the home value as an initial deposit.
  • The government will lend you 20 per cent of the home value; this will be your equity loan.
  • The remaining 75 per cent of your home value will come from a mortgage lender.

However, the equity loan from the government may change if you are residing in London as the houses in the area are more expensive. The government will lend you 40 per cent if you are buying a house in London, which means you only have to borrow 55 per cent of your property value from a mortgage lender.

With that said, it is important to work with a financial advisor or mortgage advisor to ensure you get professional, personalised advice on how to spend or save your money and arrange your mortgage agreement.

Once you have all the finances in place, you can find a local Help to Buy agent to provide you with further assistance. They will check if you meet the Help to Buy eligibility criteria and if you are capable of paying the equity loan. They are also the ones who will authorise your application.

While waiting for your application to be approved, you should look for a property from a registered house builder who is advertising Help to Buy homes on the market. Once you find your dream house, you will be able to reserve it immediately, though you will need to pay a reservation fee of no more than £500.

After reserving your house and having your application approved, you are now ready to purchase your home! Make sure to find trustworthy solicitors who can check your equity loan and prepare to necessary legal documents to buy your property.

This Help to Buy Equity Loan scheme will only run until 31 March 2021. However, a new equity loan scheme will start on 1 April 2021, which is limited to only first-time buyers. So, if you are a homeowner who wants to benefit from the current scheme, then you should submit your application as soon as possible!

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Other Help To Buy Schemes

Aside from the Equity Loan, the government has also released other affordable schemes such as the Help To Buy ISA, and Shared Ownership properties.

The Help to Buy: ISA scheme allows first-time buyers to save more money, with the government boosting their savings by 25 per cent. For every £200 that you save, the government will add a bonus of £50. The maximum amount of money that you can receive from this scheme is capped at £3,000.

The criteria for eligibility for a Help to Buy ISA is as follows:

  • The home you are buying is in the UK.
  • You are purchasing a house with a maximum price of £250,000 (£450,000 if in London).
  • The property is the only home you will own and live in.
  • You must use a mortgage to purchase the property.

Once you have saved at least £1,600 after applying for the ISA scheme, only then can you claim the minimum government bonus of £400.

The ISA scheme ceased accepting new accounts on 30 November 2019. However, it remains in operation for those who have opened an ISA account before the said date. ISA members can continue using their accounts until November 2029.

You should also consider the Shared Ownership scheme, which allows you to buy a percentage share of a new or existing property, usually between 25 and 75 per cent, then pay rent on the remaining shares.

The shared ownership scheme also allows for increasing your share in the property up to 100 per cent as you are able to afford to. This is a great option for those who couldn’t afford a 100 per cent mortgage of their homes up-front.

You can be eligible to apply for a Help to Buy: Shared Ownership scheme in England if you meet the requirements below:

  • Your household earns £80,000 or less per year if you reside outside London, and £90,000 or less per year if you’re living in London.
  • You are buying a house for the first time.
  • You have owned a house before but don’t have enough money to currently purchase a new one.
  • You are an existing shared owner who wants to move out.

The government encourages older people and those with a long-term disability to buy their houses using this method.

The Older People’s Shared Ownership applies to those who are 55 years old or older. It functions just like the general Shared Ownership scheme, but you can only purchase a 75 per cent share of your house. Once you’ve bought the 75 per cent, you don’t need to pay rent for the remaining share.

On the other hand, people with a long-term disability can apply for Home Ownership for People with Long-Term Disabilities (HOLD), but only if the other available homeownership schemes don’t offer properties that meet their needs.

Help to Buy has a vision of assisting new buyers on the path to owning their own home, so make good use of it while you still can. For more information, fill out our contact form or give our staff a call!


How do you qualify for Help To Buy?

To get eligibility for Help to Buy, the following criteria must be met:

  • You must be at least 18 years old.
  • There is no maximum income level for your household.
  • You must be able to provide 5 per cent of the property’s full value as a deposit.
  • You have to obtain a mortgage of at least 25 per cent or more of the full property value.

Is there an income limit for Help To Buy?

If you are buying a house that is worth £400,000, and you have a mortgage of £320,000 (or £240,000 if you’re in London), you must have a Help to Buy eligibility salary of £72,000 (or £54,000 in London) to qualify for the scheme.

Can you be turned down for Help To Buy?

If you have defaulted on payments for any loans in the past, it is likely that you won’t meet the Help to Buy scheme eligibility. Your application will also be rejected if you have a bankruptcy order from the past three years or a county court judgment (CCJ) for more than £500.

Can I put down more than a 5 per cent deposit with Help To Buy?

Yes, you absolutely can. Doing so has the added benefit of reducing mortgage rates. However, you should ask for property purchase assistance from your financial advisor or Help to Buy agent so that you can fully evaluate all of your options and select the best mortgage for you.

How long does it take to get Help To Buy approved?

If you have a recorded application in the Help to Buy ISA scheme, you should receive approval verification and payment within five working days, however, the process may last up to 15 working days.

What happens after five years with the Help To Buy Equity Loan Scheme?

After five years, Help to Buy Equity Loan borrowers must start to pay an annual fee of 1.75 per cent of the value of their loan, this is payable each year at Regional Price Index (RPI) plus 1 per cent.

How do I repay a Help To Buy Equity Loan?

Repaying a government-backed Equity Loan from the Help to Buy scheme can be done through:

  • Remortgaging to another deal that you are more amenable with.
  • Paying the loan off over time either from savings or with monthly repayments.
  • Sell your Help to Buy property or downsize.

Is Help To Buy just for new builds?

The Help to Buy home ownership scheme was launched in 2013 to provide first-time buyers with assistance in purchasing properties until it was updated to include existing homeowners and home movers. Nevertheless, it remains applicable only to newly built homes at the moment.

Is Help to Buy still available?

Yes, the Help to Buy Equity Loan scheme is still available for both first-time home buyers and home movers. However, it is only set to run until March 2021. The government will update the scheme in April 2021, and the new Help to Buy Equity Loan will be limited to only first-time buyers.

Can I close my Help to Buy ISA without buying a house?

Your Help to Buy ISA eligibility is for the sole purpose of buying a house, so you should not close your account unless you’re confident that you’re about to purchase your home. You must claim your government bonus within a year of your home purchase and before your account closes.

What You Need To Know About Help To Buy Schemes

The Help to Buy: Equity Loan scheme is initiated to elevate people’s chances of owning a property in England by offering an equity loan, only applicable to properties worth up to £600,000. The government will lend you equity of at least 20 per cent of the property value, while you secure a mortgage of up to 75 per cent depending on the deposit you put down.

Thanks to the expansion of this property purchase plan, first-time buyers and prior homeowners alike can buy their dream homes; however, the scheme is only applicable to new build homes. After 25 years, or when you sell your Help to Buy house, you will need to pay back the equity loan. You can make repayments anytime you want, with the smallest amount being 10 per cent of the house value.

For more information about your Help to Buy eligibility in the UK, give one of our staff a call, we will be able to answer all your queries!

Get Expert Help To Buy Mortgage Advice

All firms are regulated by the Solicitors Regulation Authority or the Council for Licensed Help To Buy

Truth About Selling Homes After The Help To Buy Scheme

Help to Buy can make life more convenient and manageable; this lending plan for property purchases can provide you with a lot of options to choose from, depending on your current situation.

Depositing 5 per cent of a home’s full purchase price to secure an equity loan from the government is already a steal; nevertheless, interest rates are not steady. Five years from your equity loan registration, there will be a 1 per cent increase together with the Price index, currently at 2.3 per cent each year.

To pay off this debt, most people opt for remortgaging, but before doing so, take into account what your lender has to say. They might not agree to a remortgage because of the depreciating value of the property.

Don’t idly wait for the first five years to pass, start paying your equity loan as much as you can to avoid interest rates on the sixth year. You may also ask your existing mortgage lender about remortgaging and other options.

Equity Loan And Interest Rates Explained

Equity loans are cheap and present a lot of benefits – but only in the first five years. Borrowing an equity loan means that your monthly mortgage payments are far cheaper when compared to borrowing 95 per cent of your home value with a high-rate 95 per cent loan-to-value (LTV) mortgage.

There are two reasons why this purchasing plan for properties benefits you. First, borrowing from the government (equity loan) means that the amount of money you borrow from a mortgage lender will be smaller. Second, since your mortgage is lower, the amount of interest you pay is also smaller.

However, after five years, your equity loan will also start charging interest. The interest begins at 1.75 per cent, but it increases yearly based on the RPI measure of inflation, plus 1 per cent until you pay off the equity loan in full.

The best way to maximise the benefit is to pay off your equity loan before the sixth year comes. If you want to know about your Help to Buy UK eligibility, call and speak with one of our experts, we’ll be more than happy to assist you.