Support for homebuyers with a Government backed guarantee scheme
On 3rd March 2021 the Government announced a new guaranteed scheme* to help UK house buyers get on the property ladder with 95% mortgages, meaning you need a much lower deposit of just 5%.
What is a 95% Mortgage?
A 95% mortgage allows you to put in 5% of the house purchase price and take out a mortgage for the remaining 95%.
For example, if your new house is going to cost £380,000 then you would need to have £19,000 as a deposit and the mortgage company would lend you the remaining £361,000
You may also see this described as 95% LTV (Loan-to-Value) which means you are borrowing (being loaned) 95% of the value of your new property.
You still need to be able to afford the repayments with your income – just ask one of our advisers to show you how these calculations are made
How does the scheme help?
The scheme will help individuals (not companies) who can meet the following criteria:
- You need to be buying your main home, not a second home or a buy-to-let property
- The purchase price needs to be less than £600,000
- You need to be taking out a repayment mortgage, not an interest only one
- You will need to pass the lenders criteria of credit score / suitability
It is important to note that your house purchase can meet the first 3 criteria and you can still fall foul of the lender’s criteria. It is very likely that, for 95% mortgages, they will be looking for buyers who can display a very strong credit score.
What do I need to do?
If you think you may want to take advantage of one of these deals when they come in to effect towards the end of April 2021 then you should check your credit rating and take steps to improve it if need be.
Our mortgage advisers can take a look at your affordability with you and help you prepare and understand what lenders will be looking for. If you need to make changes so that you can afford a mortgage, many of these steps can take a few months to start impacting your credit score, so it’s important you plan ahead and act now if you think you might be interested.
With low / no stamp duty and a 5% deposit, you may be nearer to getting your dream home than you thought!
EDIT 30th March 2021 : These mortgages are now available – please call us on 0808 231 1073 to find out more.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
