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The government offers a specific help called help to buy mortgages that only applies in some cases. Also, if you represent a local authority tenant you may eligible for the right to buy mortgages. You can find more about your status in your tenancy agreement. In this article, you will find more information about the conditions and the types of schemes available regarding the help offered by the government and also how to find out what conditions are necessary for you as a tenant if you want to buy your rental property.
If you are interested in what help the government offers and you want to know how to get it the first step and most advisable for you to take is getting the help of a specialized broker. A mortgage broker can give you the information you need according to the situation you are in, can tell you if you are eligible of receiving it and it will also assist and support you throughout the entire process of application and receiving. This help to buy mortgages applies only for the first time buyers. It requires a deposit of 5% which you have to put down out of your savings. You can take out of this help up to 20% of the total purchase price of only new build properties. If you are interested in buying a new build property in London the amount goes up to 40% of its entire price. If the builder wants to contribute towards the deposit amount the government will accept that but its contribution has to be an addition to your 5%. A mortgage broker will inform you about all the various schemes available.
One big advantage to getting this help from the government is that you will not have to pay anything back during the first 5 years. If you are in the position which lets you afford to pay back this loan you can do it to your own choice in the first 5 years without having to pay any additional fees or penalties and also without any interest. After these 5 years, the interest of 1.75 % will be added no matter the remaining amount of money left to pay. After these 5 years, it is also important on respecting your monthly bill for paying back the loan otherwise additional fees can be applied.
To get the help to buy mortgages it is important to know you have to be a first time buyer. Also, this help only applies to new build properties. The scheme does not apply to any new build. The builder has to be registered for this help to buy. Before deciding on which property you would fancy buying contact the builder to see if he checked in with the government to allow first time buyers to be able to afford their build through this type of loan. If not try to see if he is keen on doing it because no matter in what stage their building is he can still go and register for it. Depending on the building's location a maximum price is set. The capital of the property is usually set at 1.5 times the average price in that specific region.
This right to buy mortgages scheme only applies to tenants that want to buy the rental property they have a contract. In this case, it should be first checked the tenancy agreement and read all the rules about living in that property. These legal documents present these rules but also give the tenant different rights such as the right to buy mortgages. In case you are a local authority tenant there are high chances for you to be eligible for this scheme. The final price of the property you are interested in buying is calculated only after a discount is applied on the open market full value. The percentage of this discount you get is usually determined by how much time you already have living on the property as a tenant. This type of scheme does not require a deposit to be put down first. The lenders accept the discount applied as a deposit. It is to be taken into consideration that the only money you need is for some fees that might be involved but not necessarily.
In case you need extra money for house improvements you can receive it through this right to buy mortgages scheme. The lenders are the ones who can or cannot allow you to apply for this additional sum. Before applying it is best to make some calculations on the things you plan on doing to improve the house because the estimation of the amount is required to be provided.
You can apply for this benefit even if you already have other forms of benefits received from the government. It will not affect you in any way. The only aspect to be taken into consideration is that you will have to provide proof with the necessary information that states you can afford to pay all the loans back through the monthly repayments. The only thing that you will not be able to receive anymore once you are a homeowner is the housing benefit.
When it comes to mortgages in order for you to get the best deal it is best to get the help of a specialized broker. This can save you a lot of time and extra costs on fees plus you get assistance at every step until the process is done and you get the keys to your property.
· A discount is applied when getting the right to buy
· No deposit is needed in right to buy mortgages
· You can get extra money for home improvements
· You need to be first time buyer to get the help to buy mortgages
· A deposit of 5% is necessary for getting the help to buy
· The help to buy scheme only applies to new build properties
· Paying back starts to be mandatory only after 5 years after the loan has been received.