Are you a first-time buyer with dreams of owning your own home in Wales? The Help to Buy scheme in Wales might just be your ticket to making homeownership a reality sooner than you thought. As of April 2023, the revamped Help to Buy Scheme is back in action, making it more accessible and affordable than ever for aspiring homeowners.
Primesave Properties wants to make homeownership available to everyone, so we are proudly registered under the Help to Buy Wales scheme. Before you choose your dream home, here’s some more info on how the scheme works.
How Does Help to Buy Work?
The Help to Buy Scheme is a straightforward initiative designed to give you a leg up on the property ladder. Here’s how it works:
Shared Equity Loan
With Help to Buy Wales, you’ll receive a shared equity loan from the government, equivalent to 20% of the total purchase price of your new build home.
Your Deposit
You’ll need to contribute a minimum deposit of 5% of the property’s value. This is your stake in your future home.
Mortgage
The remaining balance, which covers 75% of the property’s value, will be covered by a repayment mortgage.
Let’s break it down with an example. Imagine you’re eyeing a Primsesave Properties home valued at £200,000:
Your deposit: £10,000 (5%)
Help to Buy equity loan: £40,000 (20%)
Your mortgage: £150,000 (75%)
It’s important to note that not all properties are eligible for Help to Buy Wales, and the property’s value must not exceed £300,000.
Who Is Eligible?
Before you dive into this exciting opportunity, you need to ensure you meet the eligibility criteria:
Property Value
The property you’re eyeing must have a maximum value of £300,000, like one of the many homes in Oaks Meadow or Waterside Meadow.
Approved Builders
You can only participate in the Help to Buy Scheme through a builder registered with Help to Buy Wales, like Primesave Properties.
Financial Capacity
You must be financially capable of covering the monthly mortgage repayments, which should amount to at least 80% of the property value, in addition to your 5% deposit and the 20% equity loan.
Mortgage Agreement in Principle
You must have a mortgage agreement in principle from a lender that covers the required value to manage 75% of the property’s cost.
No Subletting
It’s not permitted to sublet the property you purchase through Help to Buy Wales.
Current Homeowners
If you already own a property, you can’t use this scheme to purchase a second home.
Repaying Your Equity Loan
Now, let’s talk about repaying your equity loan. It operates a bit differently from typical loans:
Your shared equity loan must be repaid within 25 years of buying your home. However, you can choose to repay it in full at any point during this period.
The repayment process allows you to pay a portion of the loan or settle it entirely without selling your property. This flexible option, known as “staircasing,” can be initiated after the completion of your home sale. Please keep in mind that the amount you pay back must be at least 5% of the market value. Additionally, staircasing isn’t possible if you’re in arrears with your monthly payments.
The Help to Buy Scheme in Wales is your gateway to homeownership, making your property dreams a tangible reality. So, if you’re ready to embark on this exciting journey towards owning your new home, get in touch with our team today to speak through your options.