Contractor Mortgage Guarantee – new Help to Buy rules

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Contractor Mortgage Guarantee

There’s news of a Contractor Mortgage Guarantee.

Specialist Contractor Mortgages received a major boost with the new rules on Help To By spelled out by Chancellor Osborne today.

Previously lenders had been giving no more than 80% mortgages which reduced the demand. However, the Government stepped in with Help To Buy. The Government would underwrite 20% of the mortgage at zero interest. This meant that contractors could get mortgages at up to 95% of the total in a Contractor Mortgage Guarantee.

However, it was only for new houses. That is all to change, according to the statement today. A new scheme worth £12bn will launch in January 2014 which means that contractors will be able to join the Help To Buy scheme when purchasing any property valued at less than £600,000.

Help to Buy Scheme

Existing homeowners can use the Help to Buy scheme if they want to re-mortgage their home.

It won’t be available for Let-To-Buy folk or for second homes. However, one would expect that. The borrowers will have to pass lending tests – you would expect that too.

The Government already see the Help to Buy scheme as a success. Pundits are warning tat it could create a boom in the housing market. The IMF have warned that it will inflate house prices.

This is pretty much what the Government want, though, as they try to create a feelgood factor, ahead of the next election, with nicely rising house prices.

Contractor Mortgage Guarantee Agreement

Said Chancellor Osborne “The contractor mortgage guarantee will support an increase in high loan-to-value mortgages for people who can’t afford large deposits, and it will also boost housebuilding. As of today, lenders have the detail they need to go away and get ready for next January’s launch.”

There have been 7,000 uptakes of the loans in the first 4 months of Help To Buy.
There are already signs of an uptick in the housing market with prices up 4% this year when they were predicted to be flat.

Contractor Mortgages are now booming according to specialist Contractors Mortgages broker Tony Harris who said that the market is ahead of its previous peak of 2007.

To find out more or to get a quote click on Specialist Contractor Mortgages