Help to Buy 2 : Mortgage Guarantee Launch
Help To Buy – Phase 2 – The Mortgage Guarantee
One of the biggest obstacles to owning your own home is that of raising the deposit and not everyone can rely on family to help! Things will be a bit easier from today as the second phase of the government’s “Help to Buy” scheme is launched.
Phase 2 of Help to Buy is the Mortgage Guarantee and it is available to help with the purchase of both new build and existing properties valued up to £600,000 anywhere in the UK.
The Mortgage Guarantee is available to both first time buyers and those looking to move but cannot be used for buy-to-let mortgages.
Help to Buy is a government scheme which could make getting on to, or moving up, the housing ladder more accessible to thousands. It helps existing home owners and first time buyers purchase a home with as little as a 5% deposit.
The process of applying and repaying the mortgage is the same as it would be for a standard mortgage – the buyer will see no real difference. It is intended to increase the availability of affordable mortgages for buyers with a minimum 5% deposit. The government is going to make this possible by guaranteeing repayment of the mortgage loan to the lender. There is no additional paperwork for the buyer to complete and no extra charges. The arrangement is between the lender and the government.
There are those that worry the scheme may create an artificial bubble in the housing market with house prices falling when the scheme ends in three years’ time. The expectation is that the scheme will help to “kick-start” the housing market and help the economy and by the time the scheme ends the housing market will have recovered sufficiently to stand on its own. The government announced last week that it was giving the Bank of England extra powers to help it ensure the market does not over-heat.
If you thinking of buying your first property or moving house and would like independent mortgage advice, Graham Westhall at SWLaw Investment and Financial Planning Ltd will be pleased to offer you a free consultation. Graham is a Chartered Financial Planner with over 25 years’ experience of financial services.