Help To Buy Wales
JBM Mortgage Brokers can help you with the Help to Buy Wales scheme. For more information on the Help to Buy have a look at the information below. Help to Buy – Wales allows eligible purchasers to buy new-build homes with assistance from the Welsh Government in the form of a shared equity loan.
What does this mean in practice?
Help to Buy – Wales shared equity loans are available to both first-time buyers and home movers wishing to purchase new-build homes worth up to £250,000. With Help to Buy – Wales, buyers won’t be able to sub-let their home. With Help to Buy – Wales:
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buyers need to contribute a deposit equal to 5% of the property price.
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the Welsh Government (through Help to Buy (Wales) Ltd) will fund a shared equity loan for up to 20% of the purchase price.
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buyers will then need to secure a mortgage to cover the remaining balance.
Example Undertaking
| For a property worth £200,000 | Amount | Percentage |
|---|---|---|
| Cash deposit | £10,000 | 5% |
| Shared equity loan | £40,000 | 20% |
| Your mortgage | £150,000 | 75% |
If in the future the home in the table above sold for £210,000 the buyer would get £168,000 (80%, based on their mortgage and the cash deposit) and pay back £42,000 on the shared equity loan (20%). The buyer will pay off their mortgage using the proceeds of the sale and will then repay the Help to Buy -Wales shared equity loan.
Are there any fees attached to the shared equity loan?
From the time a buyer receives the shared equity loan they will be charged a small administration fee of £1 per month. Then, in the 6th year, they’ll be charged interest of 1.75% per annum of the original shared equity loan amount. After this, the interest will increase every year.
This increase is worked out by using the Retail Prices Index plus 1%. All buyers will be contacted before the shared equity loan interest starts and they’ll also be sent a statement about their shared equity loan each year. The fees do not count towards paying back the shared equity loan. Further details of the Help to Buy – Wales shared equity loan can be found in the below guidance document. Information sourced from www.helptobuywales.co.uk
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage.
