Buying a new family home with Help to Buy in Scotland

The Help to Buy scheme offers first time buyers the opportunity to get on the housing ladder in what would otherwise be a very difficult economic climate for buying a home. For those just starting out with a family, it’s an ideal opportunity.

With just a 5% deposit, Help to Buy makes it possible to buy a new-build or existing home priced up to £400,000. The mortgage guarantee scheme is available throughout the UK and works the same way as any other mortgage except that the government offers lenders the option to purchase a guarantee on mortgage loans.

As a direct result of this support, lenders taking part can offer home buyers more high-loan-to-value mortgages. Borrowers will still have to pay back the whole amount borrowed.

So if you’ve paid a 5% deposit, you will need to pay back a 95% mortgage.

Who’s involved?

Lenders taking part in the scheme include Aldermore, Bank of Scotland, Barclays, Halifax, HSCB and Lloyds. Under the Help to Buy (Scotland) scheme if you already own another home you are expected to sell this before you purchase a home under the scheme.

The scheme is not available to buy-to-let investors and you are not permitted to part exchange your existing home to buy a new home. Permission to sub-let your home will be allowed but only in certain limited circumstances.

How to apply

Before your application to the scheme can proceed, you need to speak to a lender or independent financial adviser. Then you should ensure that you have adequate funds to pay for a reservation fee (if required), a deposit of 5% of the full purchase price of the property and all other relevant fees including stamp duty, legal fees and registration fees.

In order to know whether you are eligible to participate in the scheme you will need to submit a completed application form to an agent administering the scheme which includes the banks previously mentioned.

The agent will then contact you to let you know if your application is eligible. If you can reasonably afford more than 90% of the full purchase price, you will not be eligible to receive assistance under the scheme.

Offers

Cala Homes’ Help to Buy scheme in Scotland are also taking part in the scheme which allows you to repay all or part of the equity stake held by the Scottish government. You will be given the option to increase your equity share by a minimum of at least 5% in any one year and may even increase your share up to 100% if you choose to do so. It may therefore be worthwhile speaking to them about how they could help you.

Disclaimer: This is a sponsored post in association with Cala Homes.