Help To Buy Advice | Grace Homes

Help To Buy Advice

The Help to Buy Equity Loan has changed. You can read about the changes in full here.

How the Scheme Works

With the Help to Buy scheme you own 100% of your home, but you only have to cover 80% with your mortgage and deposit. The remainder is covered by an equity loan funded by the Homes and Counties Agency and is held as a second charge on your property.

This loan must be repaid after 25 years, when the mortgage comes to an end or when you move, whichever, happens first, but there is nothing to pay on the equity loan for 5 years.

From year 6 a % is payable on the equity loan. The loan can be repaid at any time as well as stair-casing repayments which must be a minimum of 10% of your home's current value.

The equity loan is to be repaid when you sell your home based on the same percentage split at the time of sale.

Am I Eligible?

In order to qualify for the Help to Buy Equity Loan (2021-2023) you will need to meet the following criteria:

  • You must be a first-time buyer
  • The new-build home you buy must be within the relevant regional price cap (view the price caps here)

You and anyone you’re buying a home with must:

  • Not own a home or residential land now or in the past in the UK or abroad
  • Not have had any form of sharia mortgage finance.

Please note, applicants that make fraudulent claims will be liable to criminal prosecution and will be required to repay the Help to Buy Equity Loan immediately.

The Next Steps

If you are interested in finding out more about the Help to Buy scheme, please speak to us. We'd be delighted to help. We also recommend that you speak with an Independent Financial Advisor to confirm your financial status.

If all of the necessary criteria are met, to reserve your new home you simply need to complete a reservation form and a property information form, which our Sales Manager will provide you wtih. We also require a cheque of £500 to reserve the property.

  • The Reservation Form and Property Information Form along with proof of identity will be forwarded to EMHomeBuy
  • The fully completed forms will be assessed within 4 working days
  • Once approved EMHomeBuy will send the Authority to Proceed to both yourself and your solicitor
  • Your mortgage application form will then need to be processed by your Independent Financial Advisor
  • The remaining process will be discussed with you by your solicitor
Example of a Purchase with an Equity Loan Scheme Cost Percentage
Property Purchase Price £200,000  
Your Mortgage £150,000 75%
Equity Loan £40,000 20%
Cash Deposit £10,000 5%

If the home in the above table sold for £210,000, you would receive £168,000 (80% from your mortgage and the cash deposit) and pay back £42,000 on the loan (20%). You would need to pay off your mortgage with your share of the money.

Call for more information 01536 740019

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