Buyers
The chancellor has announced in the Budget a new mortgage scheme which will enable homebuyers with a 5% deposit to get accepted for a mortgage, with part of the loan being backed by the Government. This scheme is set to operate from April until December 2022.
The uncertainty of the pandemic meant a lot of lenders didn’t want to offer their riskier 95% mortgages so they started to rapidly disappear. As a result, this scheme is to encourage lenders to re-enter the 95% market. The great news is that it isn’t only for first-time buyers, it includes previous homeowners and homemovers purchasing a main home.
What criteria has to be met to be eligible for this scheme?
- The mortgage must be for a main residential home in the UK. It cannot be used for those looking to purchase a second home or buy-to-let property.
- The value of the property must be £600,000 or less. If it is worth more, you will not be able to apply.
- Your deposit must be equal to 5% and 9% of the property’s purchase price. This means your mortgage loan to value will be between 91% and 95%.
- You must be applying for a capital repayment mortgage, not interest-only mortgages.
- You will need to pass the lender’s mortgage affordability criteria. Lenders will look at your income and expenditures.
The pandemic caused a lot of financial uncertainty for a lot of people but with the news of the government helping buyers with this new scheme and the extension of the stamp duty, buyers are able to get back on the housing ladder.
Are you looking to buy? Wright & co can help find your ideal home in Hertfordshire, Essex and surrounding areas. Find out how much you could borrow with our mortgage calculator.
The team can help book a viewing and answer any questions on the area and property – get in touch.
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