Getting the best Help to Buy deal for your client

The Help to Buy shared equity scheme mortgage scheme is run by ‘HomeBuy Agents’ who are appointed by the government to assess eligibility of each application and make sure that buyers could not afford to buy a home without government help but can afford the mortgage repayments.

In order to qualify, Mark Bullard, head of sales at NatWest Intermediary Solutions, says borrowers must meet the following requirements;

1) They must be looking to buy their only home as their main residence.

2) It is not available for buy-to-let investment or the purchase of second properties, including holiday homes.

3) They can be a first-time buyer or home mover.

4) There is no restriction on what applicants earn – however, their financial situation will be assessed to ensure that they are not simply choosing to put down a smaller deposit and/or take out a smaller mortgage than they could otherwise afford.

5) They must buy a new build property on a participating new development.

6) They must have a deposit of at least 5 per cent of the property purchase price.

7) They must be able to afford the mortgage repayments.

While both schemes allow buyers to put as little as 5 per cent into the purchase, David Hollingworth, associate director of London & Country Mortgages, says the equity loan scheme will suit those that have also struggled to meet the borrowing amount required to buy a new property.

Mr Hollingworth says they will have to repay the equity loan and they need to understand that will be calculated at the same percentage of the market value of the property at that time.

He says the guarantee scheme has improved the number of options for borrowers with as little as 5 per cent and the rates have improved as well.

Mr Hollingworth says: “It has also seen other lenders launch at 95 per cent LTV, which is another benefit and borrowers should not simply confine their search to Help to Buy.

“If borrowers can stretch to a bigger deposit then they will still get a better rate and wider choice of deal.”

Knowledge is key as access to some of the equity loan schemes may be limited to those on the developers’ panels but others like Nationwide offer some of their core rates to the wider market, he adds.

All lenders offering mortgages through the Help to Buy mortgage guarantee and equity loan scheme have full details available on their website of their rates and scheme details, according to Ian Wilson, head of Halifax Intermediaries.

But as not all lenders support both Help to Buy schemes, Natwest’s Mr Bullard says it is probably best to speak to the lender business development managers (BDMs) in the first instance.