Mortgages Using the Help to Buy Scheme – It’s All in The Affordability

small wooden houses representing purchasing property

Purchasing a first home is an exciting and nerve racking process all wrapped into one and the  Government’s Help to Buy initiative is an incentivising way for first time buyers to get onto the property ladder. Establishing which home and mortgage is right for you all lies in the affordability of the property. In addition to this, there are a number of variables to factor in when considering using the Help to Buy scheme. Here, we provide insight into the Help to Buy scheme and the Mortgage Comparison Table that we use when helping you to secure your mortgage.

What are the variables of the Help to Buy scheme?

Variables are inclusive of:

·        Your salary and household income

·        Unsecured credit commitments

·        Service charge and ground rent of the property

·        Equity loan monthly repayments

With further considerations of:

·        Your age affects the achievable overall length of the mortgage, otherwise referred to as ‘the term’

·        Your deposit amount available – which can be more than 5%

·        Which lenders will consider your income most favourably – this is an area we can establish for you as we are unlimited to first charge lenders, we can approach

Finally, with all variables being considered, can you still borrow enough, or do you need to compromise in some way to achieve your overriding objective?

Property expectations dependent upon household income

In our previous Help to Buy blog, we established how the Help to Buy scheme can help you and now. The image below is a visual representation of various levels of income and what the property expectations would be for each tier of financial investment.

* All based on a term of 30 years; £150 service charge; 5% purchaser deposit only; 20% equity loan.

The narrative this portrays is that based on the various levels of income, there should likely be a home out there that is available for you to purchase. Although, considerations around the duration of commuting to work and distance from friends and family may mean that you decide to hold on until your income or deposit increases, in turn expanding your value capacity and the property you can choose from.

Our process for your initial mortgage application

Considering your scenario, we would run through a Mortgage Comparison Table for whichever is most applicable in order for you to consider all avenues and ensuring the most cost-effective means of purchasing a house was achieved. An example of our Mortgage Comparison Table is below:

We can assist you with your Help to Buy mortgages

Ultimately, the key thing to review when looking to invest in the Help to Buy scheme is the best option moving forward that enables you to purchase a new home with confidence and positivity. Our mortgage brokers at Hawke Financial Services would be happy to run through your mortgage enquiry and inform you of the details of the Help to Buy scheme. Get in touch with us today to speak to Adam Hollidge, our Help to Buy specialist.