How to Buy a Property in the UK with Help to Buy

Buying a property in the UK can be a daunting task, especially for first-time buyers. However, with the introduction of the government’s Help to Buy scheme, purchasing a property has become much more accessible. In this article, we will discuss how to buy a property in the UK with Help to Buy.

What is Help to Buy?

You can call Help to Buy program as an initiative introduced by the UK government, which helps existing homeowners as well as first-time homebuyers. When you are looking forward to purchasing a property by making a smaller deposit than what is needed, this would be a great option to consider. When it comes to the Help to Buy loan, you will notice that there are two main options available to proceed with as well. They include the Help to Buy ISA and the Help to Buy Equity Loan. 

Help to Buy Equity Loan

If you are a first time homebuyers in the UK, you are eligible for property ownership through the Help to Buy Equity Loan. Whether you are planning to purchase a new property or build a new property, you will be able to proceed with obtaining this loan. 

Under the Help to Buy Equity Loan, the UK government will provide you with an equity loan. This loan amount is equivalent to 20{13de42d20a9e80f25396ead9be8688686366e6031fe59ffe7a0e7e64b5877298} of the overall property value. But if you are planning to buy property or build property in London, you will be able to receive a loan amount that is equivalent to 40{13de42d20a9e80f25396ead9be8688686366e6031fe59ffe7a0e7e64b5877298} of the overall property value. This loan amount provided to you by the government will have to be paid back, but you will not be asked to pay any interest during the first five years. 

To become a qualified buyer, you will need to contribute towards the deposit with at least 5{13de42d20a9e80f25396ead9be8688686366e6031fe59ffe7a0e7e64b5877298} of the overall property value. Then you can go for a mortgage to cover up the remaining amount of your property purchase. 

Help to Buy ISA

The Help to Buy ISA is a savings account that is available to first-time buyers. For every £200 saved, the government contributes an additional £50, up to a maximum of £3,000. The savings can then be used towards the purchase of a property.

Steps to Buying a Property with Help to Buy

• Check Your Eligibility

Before applying for Help to Buy, it is important to check your eligibility. The Help to Buy Equity Loan is available to first-time buyers and existing homeowners who wish to purchase a new build property, while the Help to Buy ISA is only available to first-time buyers. There are also restrictions on the maximum property value that can be purchased under the scheme.

• Find a Property

Once you have determined your eligibility, the next step is to find a property. The Help to Buy Equity Loan is only available for new build properties, so it is important to check with developers that they offer the scheme. The Help to Buy ISA can be used towards the purchase of any property.

• Apply for Help to Buy

To apply for Help to Buy, you will need to contact a Help to Buy agent in your area. They will provide you with information on the scheme and guide you through the application process.

• Arrange a Mortgage

Once you have been approved for Help to Buy, you will need to arrange a mortgage. The amount of mortgage you can borrow will depend on your income and the size of your deposit.

• Exchange Contracts

Once your mortgage has been approved, you can exchange contracts with the developer. At this stage, you will need to pay a deposit and agree on a completion date.

• Completion

The final step in the process is completion. This is when the balance of the purchase price is paid, and ownership of the property is transferred to you.

Benefits of Help to Buy

The Help to Buy scheme has a number of benefits for first-time buyers and existing homeowners. It enables buyers to purchase a property with a smaller deposit than would normally be required, making it easier to get on the property ladder. The interest-free loan for the first five years also helps to reduce the monthly mortgage payments, making them more affordable.

Additionally, the Help to Buy ISA provides a government bonus of up to £3,000, which can be a significant contribution towards the purchase of a property.

Final words

Buying a property in the UK with Help to Buy is a great option for all the existing homeowners as well as first-time home buyers. It provides a way to purchase a property with a smaller deposit, reducing the financial burden of getting on the property ladder. By following these simple steps, you can ensure that you take advantage of the benefits of the scheme and purchase your dream home.

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