Equity Loan to buy a HouseLoan to buy a house at equity
How do I help buy an Equity Loan Scheme?
The government will lend you up to 20% of the costs of your new home with "help to buy", so you may only need a 5% down payment and a 75% mortgages to make up for the remainder. In order to mirror London's recent real estate price, the government is raising the equity loan ceiling for new home purchasers in Greater London from 20% to 40% from February 2016.
It is open to first-time purchasers and present homeowners who are purchasing a new home. At first glance, with a HELP to Buy Loan of 120,000 outside London and 240,000 inside London, this is good news to those with restricted funds looking to buy a new home.
Naturally, one could also argue that such a grant could drive house values even higher. Out of London, following the government's example; if a house is bought for 210,000, you get 168,000 (80% of your mortgages and your deposits) and you repay the 42,000 pounds help to buy a loan (20%).
You' d have to repay your loan with your cut of the cash. They will not charge any credit charges for the 20% loan for the first five years of ownership of your home. Five years later, you must repay an interest rate of 1.75% of the amount of your Help to Buy Shares hare Equity Loan at the purchase date of your real estate, which increases each year thereafter by the Retail Price Index (RPI) plus 1%.
Your refundable principal is the portion of the fair value of your home financed by this loan plus interest and fees. Under the loan contract, the amount you have to pay back depends on the value of your home if you pay back the Help to Buy Equity Loan and the percentage of your mortgage loan that you have paid back in the meantime.
This loan must be repaid after 25 years or sooner when the real estate is sold. Please call a mortgages advisor on 01628 507477 or get in touch with us for more information.