Are you a first-time homebuyer? Well, you might be wondering what options are available to you after the Help to Buy scheme closed its doors in 2019. This government scheme assisted first-time buyers with the deposit for their homes. Although it was a popular option, there are plenty of other alternative schemes available for prospective homeowners. Let’s take a quick look at the Help to Buy scheme and a further look at what’s still available for those of you looking to buy.
Help to Buy Equity Loan
The Help to Buy Equity loan was a government scheme helping first-time buyers by covering up to 20% of the property value (and 40% for London buyers). The great advantage of this was the significantly lower deposit needed for first-time buyers, who don’t always possess the upfront funds for a traditional mortgage. The slight ‘downfall’ of this scheme was that it was not free money! After the initial five-year interest-free period, homeowners who used the scheme are expected to repay the full loan amount, plus any interest. If you took out a help-to-buy equity loan with the government and are unsure about your help to buy loan repayment options, the specialists over at https://www.samconveyancing.co.uk/news/conveyancing/help-to-buy-repayment-after-5-years will be able to tell you everything you need.
Lifetime ISA (LISA)
This is a similar government scheme to the Help to Buy ISA. LISAs offer a 25% bonus to your savings for your first home or savings for later life. You can put in up to £4k each year, all the way up until you’re 50! The 25% bonus does have a limit of £1k per year, however.
Shared Ownership
This lets people buy shares in a property (up to 75%) and then pay rent on the remaining portion. Shared Ownership is a great option for those who can’t quite afford a full mortgage but still want to get on the property ladder.
First Homes Scheme
Finally, this local authority initiative offers a discount of up to 50% on a property for first-time buyers and key workers. This scheme isn’t available everywhere, so you’ll have to research its availability in your region.
Pick a Scheme That’s Right for You
Overall, the best alternative will depend on your financial situation and your situation. Explore as many schemes as possible before coming to a final decision. Remember, there are also certain mortgage options you can take to lower your deposit to 5%, such as the deposit unlock and guarantee mortgages. Do your research, and don’t settle for anything less than what you want – and what you can afford. Happy hunting!
