FAQ's

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Help to Buy FAQ’s

Can I buy with an interest-only main mortgage?

Can I part exchange my existing home for a Help to Buy home?

Are there any restrictions on the properties that I can purchase?

Will I have to pay Stamp Duty?

 Who is responsible for repairs and on-going maintenance to my home?

Can I own other homes and buy a Help to Buy home?

Can I own a Help to Buy home and buy a second home?

Can I sublet my Help to Buy home?

After purchasing my home, can I increase my mortgage or take out another loan?

After five years of ownership how is the fee collected?

How do I repay my equity loan?

Can I use Help to Buy ISA?

Why do I need to complete a Direct Debit Form with my application?

If my mortgage term is lower than 25 years when is the equity loan repayable?

 

See more Frequently Asked Questions on the national Help to Buy website

 

Can I buy with an interest-only mortgage?

Your main lender’s mortgage must be a repayment loan with interest and capital repaid every month. This ensures you make the Help to Buy purchase on a sound basis and protects the government’s’ investment in your home.

Can I part exchange my existing home for a Help to Buy home?

Part exchange is not available.  House builders selling Help to Buy homes cannot offer a part exchange sale.

Are there any restrictions on the properties that I can purchase?

All Help to Buy equity loan homes are only available on new build developments where the Homes and Communities Agency has a registration agreement with the house builder. You can only purchase from these house builders. The maximum purchase price is £600,000.

Will I have to pay Stamp Duty?

The Government’s standard rules and procedures for Stamp Duty Land Tax (SDLT) apply to all Help to Buy purchases. SDLT is payable at the time of purchase, on the full purchase price of the home. That is, the amount paid by you (the first mortgage and any cash contribution) plus the value of the Help to Buy loan. There is no further SDLT to pay on any ‘staircasing’ repayments or repayment when the home is sold. You should budget for SDLT on the full open market price of the property when you purchase a Help to Buy home.

Who is responsible for repairs and on-going maintenance to my home?

You will own 100% of the property, therefore it is your responsibility to repair and maintain your home. New homes often come with a guarantee that will cover certain defects for up to 10 years after it was built. This guarantee usually only covers defects in the house builder’s workmanship. Your solicitor/conveyancer will be able to advise in more detail on this.

Can I own other homes and buy a Help to Buy home?

No. Help to Buy is designed to assist you to move on to or up the housing ladder and must be your only residence. This means you will be expected to sell your current home if moving up the ladder. The disposal of your current home will be verified by your solicitor/conveyancer before you can proceed to exchange contracts on your Help to Buy home.

Can I own a Help to Buy home and buy a second home?

No. If you can afford to purchase another home you will have to repay the Help to Buy equity loan.

The property purchased must be your only residence. Help to Buy is not available to assist buy-to-let investors or those who will own any property other than their Help to Buy property after completing their purchase.

You cannot rent out your existing home and buy a second home through Help to Buy.

Applicants who make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution. Fraudulent claims will always require immediate repayment of the equity loan. 

Can I sublet my Help to Buy home?

No. Help to Buy is designed to help you to move on to or up the housing ladder. If you wish to sublet, you will first have to repay the Help to Buy equity loan assistance. In exceptional circumstances sub-letting may be considered. For example, if you’re a serving member of the Armed Forces whose tour of duty requires you to serve away from the area in which you live for a fixed period. In these circumstances you would also require approval from your mortgage lender.

After purchasing my home, can I increase my mortgage or take out another loan?

Not without permission from the Mortgage Administrator. Further advances must be approved by the Mortgage Administrator who deals with all post-sale transactions.

Advances to be used for repaying the equity loans in part (staircasing) or full will usually be welcomed and approved. Advances for other purposes will be considered by the Mortgage Administrator on a case by case basis.

You may be able to transfer your mortgage to another lender taking part in the scheme following prior permission from the Mortgage Administrator. However, you must ensure your new lender is informed that your home is a Help to Buy property with a second charge entitling the Homes and Communities Agency to a share of the future sale proceeds.  You should note that not all lenders will accept a remortgage where there is already an equity loan in place.

The Mortgage Administrator may decline permission for further advances or transfer to another lender if after assessment they consider you may be putting yourself in an unsustainable financial position.

After five years of ownership how is the fee collected?

Fees can be paid in a single yearly payment or in monthly installments.

The Mortgage Administrator will collect your fee by direct debit or standing order. They will contact you at least a month before your fees are due, to set up your repayment arrangement.  If you do not pay by Direct Debit, you will pay an additional administration charge (currently £4 per month).

You will also receive a statement each year confirming when your fees are payable. The annual statement will also show any payments you have made once you start paying the fee.

How do I repay my equity loan?

Once you have completed on the sale of your home the Mortgage Administrator is responsible for collecting the repayment of your loan. You will need to contact them when you either want to sell your property or repay your loan without selling. Their website contains all the details you will need to repay your loan – www.myfirsthome.org.uk

Can I use Help to Buy ISA?

You can use the Help to Buy: ISA with other government schemes, including Help to Buy Equity Loan and Shared Ownership, however we do not administer this scheme. For more information visit the national Help to Buy website.

Why do I need to complete a Direct Debit Form with my application?

You need to complete a Direct Debit Form with your application as you are required to pay a £1 per month management fee to the Mortgage Administrator from the start of your equity loan until it is repaid. This is referred to in your Buyer’s Guide. You must complete all sections of the form, sign and return it to us with your signed application and a copy of your signed reservation form.

If my mortgage term is lower than 25 years when is the equity loan repayable?

The equity loan is a second charge on your home, therefore if your standard mortgage is less than 25 years your equity loan must be repaid at the same time as your mortgage. You can pay off your equity loan before your mortgage in the usual way - see: How do I repay my equity loan

You must agree to the second charge being secured on your home before your purchase can be completed. Your Help to Buy equity loan also includes other obligations such as the requirement for you to insure your property. Your solicitor/conveyancer will advise you on the legal implications of your obligations and these documents before they are signed.

 

Shared Ownership FAQ’s

What is the difference between Shared Ownership and Shared Equity?

I am currently a homeowner, can I apply?

Can I apply if I receive housing benefit?

What supporting documents do I need to send with my application?

How do I know if I am eligible?

Does my application include applying for a mortgage?

I have bad credit history, can I still apply?

Do the schemes apply to all properties on the open market?

Who is responsible for repairs and on-going maintenance to my home?

I’ve got my deposit, is there anything else I will need to pay for?

What is a resale?

 

What is the difference between Shared Ownership and Shared Equity?

Shared Ownership is where you buy a percentage of the property and pay a reduced rent on the remaining share to a housing association. Shared Equity is where you own 100% of the property, but receive funding from the Government towards the purchase.

I am currently a homeowner, can I apply?

No. You will need to sell your property first or remove your name from the mortgage and deeds in case of a relationship breakdown.

Can I apply if I receive housing benefit?

No. You must be in employment and with a household income of under £80,000.

What supporting documents do I need to send with my application?

You may need to provide the following documents to the Housing Association you are buying the home with:

-          3 most recent month’s payslips

-          Photographic ID (passport or driving licence)

-          Proof of address (recent utility bill or bank statement)

-          Proof of deposit

How do I know if I am eligible?

You will be eligible if you meet the following criteria:

-          You are a first time buyer or have now sold your property and are unable to purchase a new home without assistance

-          Earn under £80,000

-          Are able to afford monthly payments (either mortgage or rent)

-          You are currently a shared owner who needs to move to a bigger property

Does my application include applying for a mortgage?

No. You will need to apply for a mortgage separately. If you are a home owner, you will need to sell your property first or remove your name from the mortgage and deeds in the case of a relationship breakdown.

I have bad credit history, can I still apply?

We do not do a credit check at application stage but you will need to be in a position to obtain a mortgage. We recommend you speak to a financial advisor.

Do the schemes apply to all properties on the open market?

No. All the schemes are for properties built using funding from the Homes & Communities Agency. These are usually new-build properties but do include some older properties where the home is up for resale.

Who is responsible for repairs and on-going maintenance to my home?

You are responsible for all repairs and maintenance on your home.

I’ve got my deposit, is there anything else I will need to pay for?

Yes. You will need to pay for:

-          A valuation

-          Solicitor fees

-          Mortgage fees, dependent on your lender

-          Any other costs associated with moving, such as removals

What is a resale?

Resales are properties that have already been bought through Shared Ownership in the past, and where the owners are now looking to sell their share and move on.

Find out more

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