NewBuy Scheme – What you need to know

 

By now we have all heard of the NewBuy Scheme that was organised by the Government in the early part of the year to help first-time buyers get on to the property ladder. Many are still left confused about what the scheme entails and who qualifies for it. So here at PropertyQuoteDirect we have put together some information that is essential for those trying to get on the infamous ladder.

The NewBuy Scheme

We may have all heard about the scheme but what is it? Well if you qualify you could be entitled to a 95% mortgage meaning that you only need a 5% deposit. In the current climate first time buyers are struggling to get the money together for large deposits so by only having to come up 5% this is helping them move out faster. The scheme is only available in England and only on specific properties. The property must be a new build from an agreed builder within the scheme and you must be purchasing your first home to live in and not for a buy-to-let mortgage.

How Do I Qualify?

There are a few rules to make sure people who need it are getting the most out of the scheme. To qualify the buyer must:

• Be a UK citizen or have the right to remain in indefinitely
• The property must be being sold for the first time
• Property value must be £500,000 or below
• Monthly income has no restriction
• NewBuy Scheme must be used for a full ownership (not shared)

Who Builds the Properties?

There are many builders that have joined with the scheme including Linden Homes, Taylor Wimpey and Barratt Homes. All builders are constructing properties in many areas around the country so there are plenty to choose from. This scheme is becoming very popular and the properties are selling out fast so if you see one you like, act fast.

The best way to approach this scheme is the more money the better. Acting fast is essential as competition between buyers is becoming greater; ensuring you have enough for the deposit is vital. As well as this, make sure you are covered for extras like legal fees and landlord insurance. Having enough for the property alone is not enough.

NewBuy Mortgages

Currently the mortgage lenders that are offering NewBuy mortgages are: Barclays, Nationwide, NatWest, Halifax and Santander. The reason why the banks are willing to offer these large mortgages under the scheme and nowhere else is because the scheme offers them protection against missed payments and repossessions. Although they are protected, it doesn’t mean that the person borrowing is any less responsible for repaying the mortgage.