Help to buy is a government scheme available for first time home buyers of new-built properties. This scheme is designed to help them in the purchase or qualify for mortgages for properties worth up to £600,000. This scheme is only available in England for the moment, with similar schemes available for people living in Scotland and Wales.
The purpose of this scheme is to help you, a first-time buyer, to buy a new-built property or secure a mortgage to get an existing property. You only need to put down 5% of the property value as a deposit.
Help to buy equity loans
With equity loans, the government offers prospective buyers 20% of the value of the property as a loan. This means that a potential homeowner can take up a 75% mortgage with just a 5% deposit. The main advantage of this type of help to buy loan is that the buyer is not charged any loan fees for the first five years. From the sixth year, you will pay 1.75% of the loan value. The fee percentage increases in subsequent years until the loan term ends.
With equity loans, you will need to repay the loan in 25 years or if you decide to sell the property. If you sell the home before completion of the loan term, you will need to pay back the loan in the same percentage of the market value at the time you borrowed.
Help to buy mortgage guarantee loans
With this type of mortgage, the government does not issue equity. Instead, the government will guarantee the borrower for up to 15% of the borrowed amount. This way, the borrower is provided with a loan with 95% LTV (loan to value) ratio. This comes with a reduced risk which would not have been the case otherwise.
This is a scheme for first time home buyers only. You need to be living in England, be able to put down the deposit and meet the minimum requirements. You also need a good credit score and a clean credit history.
A gifted deposit can be used alongside an applicant’s own savings or as the sole deposit to complete a Help to Buy scheme application. Much the same as a regular mortgage applications, gifted deposits are a great way of applying for a mortgage if you haven’t got a 5% deposit or are looking for an improved interest rate by initially paying a larger down payment.
Identifying and choosing your potential Help to Buy property is your first step… visit applicable new-build schemes and complete a reservation form which is needed alongside your application. A Help to Buy Property Information Form is also available and to be completed from the developer or online. We can then finalise your application after guiding you to the most appropriate lender that fits your circumstances and lifestyle.
The Help to Buy ISA closed to new accounts on 30 November 2019 – but if you opened your Help to Buy ISA before then you can keep saving into your account until 30 November 2029. This is the final date when accounts will close to additional contributions.
During the course of dealing with us, we will ask you to provide us with detailed personal information relating to your existing circumstances, your financial situation and, in some cases, your health and family health history (Your Personal Data). This document is important as it allows us to explain to you what we will need to do with Your Personal Data, and the various rights you have in relation to Your Personal Data. The Data Protection Officer for DNA Financial Solutions is Drew Turner. We are registered with the Information Commissioners Office (ZA239120)
Your Personal Data means any information that describes or relates to your personal circumstances. Your Personal Data may identify you directly, for example your name, address, date of birth, national insurance number. Your Personal Data may also identify you indirectly, for example, your employment situation, your physical and mental health history, or any other information that could be associated with your cultural or social identity. In the context of providing you with assistance in relation to your Mortgage and Protection requirements Your Personal Data may include:
When we speak with you about your mortgage requirements, we do so on the basis that both parties are entering a contract for the supply of services. In order to perform that contract, and to arrange the products you require, we have the right to use Your Personal Data for the purposes detailed below. Alternatively, either in the course of initial discussions with you or when the contract between us has come to an end for whatever reason, we have the right to use Your Personal Data provided it is in our legitimate business interest to do so and your rights are not affected. For example, we may need to respond to requests from mortgage lenders, insurance providers and our Compliance Service Provider relating to the advice we have given to you, or to make contact with you to seek feedback on the service you received. On occasion, we will use Your Personal Data for contractual responsibilities we may owe our regulator, The Financial Conduct Authority, or for wider compliance with any legal or regulatory obligation to which we might be subject. In such circumstances, we would be processing Your Personal Data in order to meet a legal, compliance or other regulatory obligation to which we are subject.
We will collect and record Your Personal Data from a variety of sources, but mainly directly from you. You will usually provide information during the course of our initial meetings or conversations with you to establish your circumstances and needs and preferences in relation to mortgages You will provide information to us verbally and in writing, including email. We may also obtain some information from third parties, for example, credit checks, information from your employer, and searches of information in the public domain such as the voters roll. If we use technology solutions to assist in the collection of Your Personal Data for example software that is able to verify your credit status. We will only do this if we have consent from you for us or our nominated processor to access your information in this manner. With regards to electronic ID checks we would not require your consent but will inform you of how such software operates and the purpose for which it is used.
In the course of handling Your Personal Data, we will:
From time to time Your Personal Data will be shared with:
In each case, Your Personal Data will only be shared for the purposes set out in this Customer Privacy Notice, i.e. to progress your mortgage enquiry and to provide you with our professional services. Please note that this sharing of Your Personal Data does not entitle such third parties to send you marketing or promotional messages: it is shared to ensure we can adequately fulfil our responsibilities to you, and as otherwise set out in this Customer Privacy Notice. We do not envisage that the performance by us of our service will involve Your Personal Data being transferred outside of the European Economic Area.
Your privacy is important to us and we will keep Your Personal Data secure in accordance with our legal responsibilities. We will take reasonable steps to safeguard Your Personal Data against it being accessed unlawfully or maliciously by a third party. We also expect you to take reasonable steps to safeguard your own privacy when transferring information to us, such as not sending confidential information over unprotected email, ensuring email attachments are password protected or encrypted and only using secure methods of postage when original documentation is being sent to us. Your Personal Data will be retained by us either electronically or in paper format for a minimum of six years, or in instances whereby we have legal right to such information we will retain records indefinitely.
You have the right to request a copy of the personal information that we hold about you, its origin and any recipients of it as well as the purpose of any data processing carried out.