Help to Buy Contractor Mortgages
Help to Buy Contractor Mortgages is a new scheme set up by the Government. Lenders previously were asking for deposits of 25% or more. This was keeping first time buyers out of the market. House prices, therefore, were depressed by this.
The Government brought in these mortgages to fix this. A rising housing market would do their own electoral chances no harm, either, as the election approaches.
So, what are Help To Buy Contractor Mortgages?
This is where the Government subsidises part of the mortgage. It means contractors only have to find as little as 5% of the money for a deposit.
There are two types of these kind of mortgages. There is the Equity Loan and the Mortgage Guarantee.
Help to Buy Equity Loans
Equity loans are available for first time buyers and people moving homes. All you need is the 5% deposit. You can buy a house using this up to the value of £600,000.
The Government will then give you a loan of up to 20% of the purchase price. You then just have to raise a mortgage of just 75% of the price.
They will charge you no fees for the first 5 years of the loan. In year 6, 1.75% of the loan’s value will be charged. After that fees will rise in line with the Retail Price Index.
It cannot be a second property. It can’t be sub-let. The Government doesn’t want to encourage people to build up a property portfolio subsidised by them.
Help to Buy Mortgage Guarantee
You will still be able to get mortgages with a 5% deposit using this scheme. However, you will be applying for a 95% mortgage. They will base this on your contract rate alone.
This scheme is available for any type of house, new or old, unlike Equity Loans. With this scheme 15% of the purchase price is guaranteed by the Government, so there isn’t any loan to pay back. The Government guarantee it to the lender rather than pay it.
Specialist Contractor Mortgage Brokers
You may have some problems if you walk into a high street bank or building society. They will need three years worth of accounts. They will also base the offer on your Director’s salary.
What you need is a specialist contractor mortgage broker. They can get you mortgage offers based on your daily rate annualised. They can get you Mortgages based on just your contract rather than needing to see accounts.
Indeed they can get first time contractor mortgage offers on their very first day on their very first contract within hours of them starting the contract.
Applying for Help to Buy Mortgages
To find out more or to apply by filling in the form at the bottom of the page, you should click on Specialist Contractor Mortgages