Mortgage Advice for First Time Buyers, First Time Buyer Mortgages and First Mortgage Advice

Property Buying Guide

Shared Equity

Shared Equity in the UK is undergoing a mini revival.  It is the basis for the Government's  Help to Buy scheme which is their primary instrument for helping first time buyers buy their first home.

Contact our mortgage advisors to find out about schemes near you and about the shared equity Help to Buy mortgage.

New home builders will be offering the scheme so you can approach them (through the likes of www.SmartNewHomes.com) and your local HomeBuy agent. You will only need 5% deposit, but beware that if the property goes down in value by 5% it will be YOUR deposit that is eroded.  This scheme is not only applicable to new homes but also 'second hand' ones up to the value ot £600,000. You will put down 5% deposit, take out a shared equity mortgage for 75 or 80% and then the remainder will be funded by a shared equity loan of up to 20%. The shared equity loan is repayable on the sale of the property (though it can be paid off before) along with 20% of any increase in value of the property. No interest is charged on the shared equity loan for the first 5 years, and a low interest rate is charged thereafter (it starts at 1.75%  for the 6th year then 1% over the rate of inflation after that). Schemes may vary slightly locally.

If you think shared equity is the right route for you, contact our mortgage advisors to help arrange your shared equity mortgage.

The downsides are that this scheme may only available on certain new-build properties  - those the house-builders want to sell and that if your property goes down in value, you will still need to repay the equity loan.

Take a peek at our shared equity video.

A similar scheme to Help to Buy shared equity one is shared appreciation which operates on a similar basis but as it is offered by a private lender.  The limitations on property do not apply ie you don't have to buy a particular new-build property and you don't have to be screened by your local HomeBuy agent.

See our navigation bars on the left to read about other options such as shared ownership or joint ownership, otherwise......

Request Mortgage Advice
 If you have gathered a deposit and want to buy your first home. Our mortgage advisors have details of all the best current first time buyer deals including mortgages for Firstbuy shared equity schemes. and the shared appreciation option.

You will need the services of a conveyancing solicitor who can help with wills, conveyancing and agreements. Request a quote for first time buyer legal services.

Shared  Equity in a nutshell:

  • You own the property and there are no rental payments
  • Usually offered by your local housing association under FirstBuy (household income must be under £60,000pa) or through a house-builder ( these schemes can vary)
  • You must be a first time buyer, key worker, housing association or council tenant or be in housing need
  • The Housing Association will provide you with a top up low or no cost 'equity loan' providing the lion's share of the deposit, usually up to 20% of the purchase price and the remainder is financed by your deposit and mortgage
  • You are normally entitled to repay all or some of the equity loan at and point bu you would need to check the terms of your particular scheme
  • Currently you will need at least a 5% deposit
  • When you sell the property you will need to replay the equity loan remaining and a proportion of the equity growth that reflects rhe proportion of the equity loan remaining
  • No longer restricted to new build properties which are lovely but command a premium

With shared equity, the first time buyer does not own the property in conjunction with any other party (unlike shared ownership) but takes out more than one loan for the property. A mortgage and an ‘equity loan'. You are the only person on the deeds. There is no co-owner.  However, when the property is sold, the ‘first time buyer' has to repay the loans AND a proportion of any increase in equity of the property to the party making the ‘equity loan'.

A mortgage advisor will be able to offer mortgage advice on a shared equity mortgage and which one would be right for you. You will also need to take a local conveyancing/property solicitor on your exciting journey.

Although mortgage rates are still low, rising house prices and the decline of first time buyer-specific mortgages has put pressure on people buying their first home – particularly key workers.

This means a household with an income of £32,000 could afford a house of £200,000, paying £760 each month – as opposed to £1,350 without the scheme.

A £1500 grant to help with moving in costs is also available to selected applicants.

To find out more about schemes in your area, contact your HomeBuy Agent

Find out More About Shared Equity in our shared equity guide:

Open Market HomeBuy shared equity UK scheme l  What is a key worker and how to apply?What help is on offer for key workers? l HomeBuy Agents

Useful websites:
www.direct.gov.uk – offers a range of government information and services, including for housing
www.nhs.uk/accommodation – information about accommodation for NHS staff
www.teachersupport.org.uk – support and advice for teachers  

Some local Shared Equity Firstbuy agents:

Search UK Shared Equity Firstbuy Agents for shared equity anywhere in the UK.

Most useful and most popular pages on this site:

Look for your First Property l Seek First Time Buyer Mortgage Advice l See our Best First Mortgages Comparison Table l Find out about First Time Buyer Mortgages l Find out How to Buy a House l Learn all about The First Time Buyer Mortgage l Shared Ownership




Free e-Bulletin

News and Offers for First Time Buyers

Register

There's alot going on! What do you think?

Interest rates are low but could rise? Is this a good time to buy?

Yes
No

Varialbe rate mortgages go up if bank interest rates do. Which is your preference?

Fixed Rate
Variable rate

Interest only mortgages are cheaper but in the end you don't end up owning the property. Which is better?

Interest Only
Repayment

House prices are waivering. Do you think this is a good time to buy?

Yes
No

Shared equity mortgages allow you to buy a new home with 5% deposit and an equity loan through FirstBuy. What do you think?

Too complicated
Too expensive
Too risky

Rent to buy allows you to peg a property price, save towards a deposit and pay reduced rent. What do you think?

Works best in a rising market
Too complicated
Good option


 

You Tube