First Time Buyers – what options do you have?
With First Home Fund now being closed for applications this financial year as a First Time Buyer looking to get on the property ladder, where does this leave you? It is not the end and there may well be other options that you can consider.
If you are interested in purchasing a new build property then the Scottish Help to Buy scheme is still available. If you are purchasing up to £200,000 you are eligible for the scheme (it’s not solely for first time buyers). If you have a deposit of 5% of the purchase price then you can get up to 15% of the purchase price from the scheme. It works as an equity share, you do not repay the 15% until you sell the property and they take 15% of the sale price of the property upon sale. The scheme has its own affordability criteria and certain lenders who will accept the scheme and that’s where we come in, we can help you navigate this, work out your options and if viable we will apply for the mortgage and Help to Buy on your behalf.
Builder incentives can help, if you are purchasing a new build property then the builder may be able to offer you a 5% deposit contribution so if you have a 10% deposit then moving into a new home may be more achievable thanks to this incentive.
There is also the LIFT scheme, Low Cost Initiative for First Time Buyers which is available to some clients who can demonstrate that they cannot afford to purchase without using the scheme. There are thresholds on what you can buy depending on your circumstances. There are schemes for new build properties and also schemes for second hand supply so if you meet the criteria for the scheme it could be a good way of getting on the property ladder. Like Help to Buy it is a share equity scheme so you repay the Government share upon sale of the property.
We currently have a lender who is allowing us to go to 90% loan to value so if you have a 10% deposit then we can explore this avenue for you. They do have strict criteria and it is not available on new build properties or flats which are on the open market. Otherwise the maximum loan to value at the moment is 85% so you therefore require a 15% deposit to make a purchase work.
If these options don’t work for you the encouraging news is that the First Home Fund have said that they will be welcoming applications for the financial year April 2021 – 2022 however as yet nothing has been announced on when and how to apply so watch this space as we’ll be the first to bring you the news.