An authority to proceed for help to buy is the letter authorising you to proceed with the purchase of your help to buy scheme home. This could be shared ownership or the help to buy equity loan home. Without the authority to proceed the home builder or developer will not offer you a sales contract for the home to you.
You can see a sample of the Help to buy authority to proceed here
The authority to proceed will be given to you usually after or within 4 working days from when you submit your help to buy property information form to the regional help to buy agency.
The help to buy authority to proceed isn’t the same thing as the help to buy authority to exchange which is given to you, your solicitor, the developer’s solicitor to let everyone know that you can now complete on the home purchase.
Once the help to buy agency has reviewed information such as:
- Your income
- Your personal details
- Your mortgage deposit
- Your credit file
- The property
- The developer
- Your eligibility for the help to buy scheme etc
They will let you know if they are satisfied that you are eligible for the help to buy scheme and send you the authority to proceed help to buy letter.
This will be valid for 3 months after which you will need to get a new one if you haven’t completed the purchase within those 3 months.
From when you submit your help to buy property information document it should take 4 working days for the authority to proceed from the help to buy to be with you.
This is of course if you are eligible for the help to buy.
To be eligible for the help to buy equity loan you will need:
- You need a minimum of 5% for your mortgage deposit
- You cannot purchase a buy to let property
- You cannot rent out any part of the help to buy property
- Your property cannot be more than £600,000
- You must be a first-time buyer or a home mover with no other property in the world. You will usually have to sign a first time buyer declaration form.
- You cannot have any overdue payments on any loans, any county court judgments (CCJs) against you for more than £500 nor can you have a bankruptcy on your credit file within the last 3 years.
- You can only use a standard repayment mortgage, you won’t be able to use any unique type of mortgage such as a guarantor mortgage or offset mortgage.
- You cannot use any other Government schemes with your help to buy scheme aside from a help to buy ISA.
- To have an annual maximum household income of £80,000 outside London & £90,000 in London
- A monthly income which is at least 65% more than the monthly cost of the shared ownership property you intend to purchase. This, of course, depends on the price of the property and how much you want to purchase(which will directly affect the rent you pay).
- A 5% mortgage deposit is usually a good guide
- You should not be able to afford the home on the open market
- You should have at least £4,000 to cover the costs of the mortgage and transaction. This is a guide.
- You should have a good credit file without any CCJ, recent credit defaults, IVA or bankruptcy order.
- You should be a first-time buyer but if you do own a home you should be in the process of selling it and would need to have sold it before you will be eligible for a new shared ownership property.
The authority to exchange is simply a letter given to you which you present to the new build developer and the mortgage lender showing that the help to buy agency has given you the authority to get a help to buys scheme for your home purchase.
A completion date will need to be set so both the buyer’s solicitor and the seller’s solicitor have a timeline to work towards. You can, of course, exchange contracts without a completion date as there s no legal requirement for one.
A completion date may not be legally binding but you might have already entered into some agreements which may make you liable if you don’t complete on the home purchase. You could lose any deposit or reservation fees you have paid.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.