Help to buy mortgage guarantee (What was it?)
What was the Help to Buy mortgage guarantee scheme?
This scheme is no longer operational:*
The Help to Buy guarantee scheme was designed for those who could only raise a 5% mortgage deposit. It ended in December 2016.The home would have had to be less than £600,000 and £300,000 in wales.There were no restrictions on the property.e.g new build.
In this case, the property would be owned outright by the borrower. The monthly payments were somewhat higher as the loan provided by the government was not interest-free.
How did the help to buy mortgage guarantee scheme work?
The scheme was essentially an insurance from the government which committed to cover some of the costs of any borrower default. This did not take the responsibilities away from the borrower. The Lenders were essentially able to lend at between 80%- 95% LTV.
How did I get the help to buy mortgage guarantee scheme?
This scheme was obtained simply by applying. Whilst this scheme is no longer available it is still possible to obtain loans with similar Loan to value rates.
With this scheme, buying a £100,000 home would have initially required a £5000 deposit and if at any point you defaulted the government would have stepped in to cover some of your arrears.
The help to buy equity loan scheme is however still available as well as other mortgage schemes.
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.