Affordable Home Ownership Schemes assistance to buy your own home

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1 Affordable Home Ownership Schemes assistance to buy your own home What options are available? There are a number of options: Help to buy equity loans Help to buy mortgage guarantee Shared ownership Council equity loan How does the Government s Help to Buy Equity Loan scheme work? Equity loans are available to both first-time buyers and home movers on new-build homes in England with a purchase price up to 600,000. You won t be able to sub-let your home if you use this scheme. It must also be your only property. Am I eligible for this scheme? To be eligible for this scheme you ll have to contribute a minimum of 5% of the property price as a deposit. In addition to that, the Government with give you a loan up to the amount of 20% of the price. Finally, you ll need a mortgage of up to 75% to cover the remainder of the cost. Who do I contact? You will have to contact your local Help to Buy agent in the area of your interest if you want to buy a home with an equity loan. You must buy your home from a registered Help to Buy builder. Your Help to Buy agent should then have a list of registered builders and developments for you to choose from.

2 What if I want to sell my property? You must pay back the loan after 25 years or alternatively when you sell your home depending on the circumstance you find yourself in first. Of course, you can pay back your loan at any time. 10% of the property value is the minimum you can pay back, but the amount you have to pay back will be entirely dependent on the market value at that time. Is there any fee involved? You will receive the loan interest free for the first 5 years. After that you will incur a 1.75% charge on the loan s value. This will increase every year from then on, with RPI plus 1%. The fee will not count towards the actual cost of your loan. You can find out more about this scheme online at Or alternatively, visit: How does the Government s Help to Buy Mortgage Guarantee scheme Work? Mortgage Guarantee helps you to buy a home with a small deposit of 5% of the purchase price. It s available to both first-time buyers and home movers for new-build and older homes in the UK, with a purchase price of up to 600,000. Will I be eligible for this scheme? To qualify for a mortgage guarantee, the home you want to buy must have a purchase price of 600,000 or less. It mustn t be a shared ownership or a shared equity purchase. It cannot be a second home and it can t be rented out after you have bought it. The property doesn t have to be newly build, you don t have to be a first-time buyer and there s no limit on your level of income, but you cannot use Help to Buy with any other publicly funded mortgage scheme, or an interest-only mortgage. How do I apply for this? You can apply with any lender that is taking part in the scheme, such as; Aldermore Bank Bank of Scotland Halifax Bank of Ireland (Northern Ireland only) Barclays HSBC Page 2

3 Islamic Bank of Britain NatWest RBS Ulster Bank Lloyds Bank Post Office Santander Virgin Money Find out who else is taking part at: The lender will check whether you will be able to make the repayments before they offer you a mortgage. How does shared ownership work? Shared ownership schemes are provided through housing associations. You buy a share of your home, between 25% to 75% of the home and pay rent on the remaining share. You would need to take out a mortgage to pay for your share of the home s purchase price. Shared ownership properties are always on leasehold. How do I know if I m eligible for this scheme? To be eligible for this scheme: Your household has to earn 60,000 a year or less. You must be a first-time buyer (or you used to own your own home, but can t afford to buy a new one.) You re in a council or housing association property. Do I qualify for help as an elderly person? There is another home ownership scheme that can help you. It goes by the name of Older People s Shared Ownership. You have to be aged 55 or over to qualify. It works in the same way as a general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you wont have to pay any rent on the remaining share. If you need any assistance your local Help to Buy Agent will be able to help you. Page 3

4 What if I have a disability? Home Ownership for People with Long-Term Disabilities, also known as HOLD can help you buy any home on a shared ownership basis. The only term is that you have to have a long-term disability. You can only apply for HOLD if the properties available in the Help to Buy scheme do not meet your needs. For example, if you need a ground-floor property. Your local Help to Buy Agent will be able to help you with this scheme. What if I want to buy more shares? This option will be available to you any time after you become the owner. This is more commonly known as Staircasing. The cost of your new share will depend on how much your new home is worth. If property prices in the area you live in have gone up, you will pay more than your first share. On the other hand, if the value of your property has gone down, your new share will be cheaper. It will be down to the housing association to value your property. They will let you know the cost of your new share. Additionally, you will have to pay the valuer s fee. Can I sell my home? Yes. If you own 100% of your home, you can sell it yourself. When you do decide to put your home up for sale, the housing association does have the right to buy the property back first. This is also known as first refusal and this is a right that they have for 21 years after you fully own your home. On the other hand, if you own a share of your home, the housing association has the right to find a buyer for it. To apply for this scheme contact your local Help to Buy agent in your area. How does the council s equity loan scheme work? How does this scheme work? We ll offer you a loan for 30% of the property value. You don t have to pay back any interest on the loan but it must be paid back at the end of the term, between 10 and 25 years or when you decide to sell the property. The only thing we require from you is a 5% minimum deposit and for you to be able to secure a mortgage from a high street lender to cover the rest of the property s price (65%) Page 4

5 What properties are available to me? The council s equity loan scheme is available on a selected number of new properties on certain developments in the borough. Please check our website for current details. Am I eligible for this scheme? There s only a few requirements to be eligible for this scheme. Firstly, you must live or work in Wigan Borough, or otherwise have a long-standing family connection to the borough. Secondly, an independent financial advisor must assess your finances to make sure that it is affordable for you to go ahead with this scheme. How do I apply? To apply for this scheme, complete and send in an application form with the required supporting documents. This can be sent to Wigan Council or completed with a participating developer. To find out more, please visit wigan.gov.uk. You will find all application forms and additional support online. How to contact us: Wigan Life Centre (South), Housing Services, PO Box 100, Wigan WN1 3DS Phone: housingservices@wigan.gov.uk We can make the information in this factsheet available in other formats and languages on request. Date produced (November 2014) Follow us on Twitter at Follow us on Facebook at Page 5