Help to buy mortgage Scotland (+3 tips)
In this brief blog, we will cover the help to buy mortgage scheme in Scotland and how to get a help to buy mortgage in Scotland. If you have been declined a help to buy mortgage in Scotland then this guide may also be helpful for you to understand the eligibility requirements of the help to buy Mortgage Scotland and why you may have been declined.
Can you use the help to buy mortgage in Scotland?
Yes, you can use the help to buy mortgage in Scotland. The help to buy mortgage in Scotland is different from the help to buy in England so the eligibility requirements are different. This guide discusses the Help to buy scheme in Scotland.
How does the Help to buy Scotland work?
The help to buy scotland is a government scheme for first-time buyers and home movers which helps you add to the mortgage deposit you already have so you can afford a Scottish home. The help to buy Scotland will only provide up to 15% of the property price as an equity loan to you which you can use towards your mortgage deposit.
You can only use the help to buy Scotland scheme on new build properties from new build developers who are approved by the help to buy Scotland scheme.
When does the help to buy Scotland end?
The help to buy scotland scheme will operate until March 31 2021.
You can only apply for the help to buy Scotland scheme within 9 months of when you expect to complete on your home purchase.
With the help to buy Scotland mortgage scheme you will own the home outright and your name will be on the deeds of the property. This means you will be responsible for the council tax, insurance and all other costs associated with the property.
You may have to pay land and buildings tax and will be responsible for all the repair costs involved with the house.
You should be aware that you will not be able to let your help to buy scotland home.
The types of Help to Buy (Scotland) schemes
There are two types of Help to Buy (Scotland) scheme:
- the Affordable New Build scheme
- the Smaller Developer scheme
Both of the help to buy Scotland schemes work in exactly the same way, and the help to buy Scotland agent who handles the schemes will tell you which one you’ll be applying for depending on your circumstances.
How to get a hep to buy mortgage (Scotland)
A help to buy mortgage in Scotland will require you to have a mortgage deposit of 5% and ideally get a mortgage with a loan to value of 80%. The help to buy Scotland scheme will expect that your mortgage plus mortgage deposit will cover a minimum 85% of the total value of the property.
Your help to buy Scotland mortgage must be a capital repayment mortgage, it cannot be an interest-only mortgage or any other kind of mortgage.
If you are 60 years old or older you won’t be required to take out a help to buy mortgage in Scotland for your help to buy Scotland scheme. You will however be required to provide a property valuation.
The maximum price you can use a help to buy mortgage in SCOTLAND FOR IS £200,000.
You must get your help to buy mortgage in Scotland from qualifying lenders who offer a regulated mortgage contract and are authorised under the Financial Services and markets Act 2000.
Who is eligible for the help to buy mortgage (Scotland)?
To be eligible for the help to buy mortgage in Scotland you must:
- Not own or part own any other property in the world
- Be a first-time buyer or home mover.
- You must buy your new build home from an approved help to buy Scotland home builder.
- You will usually be required to have a mortgage deposit of 5%
- You may need to have fees to cover your conveyancing costs, mortgage arrangement fee, mortgage fees etc.
- You will be able to use your help to buy ISA with your help to buy Scotland scheme.
- If you are over 60 and want to apply without a mortgage or get a mortgage for less than 25% of the property price then you will need to have a genuine need to move which must be accepted by the help to buy Scotland agent.
- You cannot conclude on your help to buy Scotland home until your other home has been sold
- You must buy a new build property
- The property you purchase cannot be more than the £200,000 maximum price cap
- The help to buy Scotland scheme is not available to assist buy-to-let investors.
- You can’t part-exchange your existing home with a home builder and buy a new
- home from them.
- You cannot use the help to buy Scotland scheme for self-build homes.
- You must purchase and complete on your home within 9 months of receiving your authority to proceed letter.
- Your affordability for the help to buy mortgage Scotland is calculated using the rule of thumb level of 3.5 times your joint gross income for a joint application and 4.5 times your gross income for a single applicant.This is the amount you will be able to get with a help to buy Scotland mortgage. You cannot get more than or less than this amount. This is irrelevant if you are over 60.
If you are unsure if you are eligible for the help to buy Scotland scheme you can simply contact one of the registered help to buy Scotland registered developers below who will analyse your case and let you know if you are eligible for the help to buy scotland scheme.
How to apply for the help to buy mortgage Scotland scheme?
To apply for the help to buy mortgage Scotland scheme you may first want to find a property you want to buy.
You should contact the builder or developer and ensure the property is both a new build and the builder is a registered help to buy Scotland scheme builder.
The help to buy mortgage Scotland builder may then recommend a financial advisor who may be able to assist you.
The financial advisor will pass you on to the regional help to buy agent who manages the help to buy scotland applications in that region. This agent will let you know if you are eligible for the scheme and provide you with an application form for the scheme which you must complete and submit to get an authority to proceed. You will be informed if you have been successful within 5 days.
The authority to proceed will contain information and instructions for your conveyancer
After this you may need to pay a reservation fee to the property developer.
You must reserve a property and obtain a full Reservation Agreement before
applying to the scheme.
The help to buy Scotland mortgage will require you put down a mortgage deposit of 5% and you must get a minimum mortgage of 25% to participate in the help to buy Scotland scheme.
How do you repay the help to buy Scotland scheme?
The help to buy mortgage Scotland scheme does not have to be repaid but the Scottish government will retain the equity in your home although you will in theory own the property outright.
The process of buying more equity in your help to buy Scotland home is known as “tranching up”.
You can buy more shares in your home with a minimum of 5% and you can purchase all the shares in your home with no penalty. You should be conscious of all other fees that will be paid when you purchase more shares in your home e.g legal fees, valuation fees, etc.
The shares will be bought at the current market value of the home.
You will have to repay the help to buy Scotland scheme when you sell the home.
If you decide to sell your house with the help of the Help to buy Scotland scheme then you will be required to pay any reasonable marketing fees. You will also be required to pay any legal fees in regards incurred by the Scottish government in regards to paying back the help to buy Scotland scheme.
Can you make any changes to your help to buy Scotland home?
You cannot make any changes or home improvements to your help to buy Scotland home without receiving written approval from Scottish Ministers.
In most cases, permission for any home improvements will not be granted and you should consider this before applying for the help to buy Scotland scheme.
If you make any home improvements to your home then these will not be reflected in the
valuation if you have received permission from Scottish Ministers but If you haven’t then you may be breaching your contract and any subsequent increase in value will be split between you and the government in relation to how much shares you own in the property.
You will not be reimbursed for the cost of any improvements made at your own expense.
Who are the help to buy Scotland agents and what areas do they oversee?
The help to buy Scotland agents include:
Highland Residential(Part of Albyn Enterprises Limited)
Contact: 68 MacLennan Crescent,INVERNESS, IV3 8DN
Telephone: 01463 701 271
They manage: Highland & Shetland Islands
Grampian Housing AssociationLimited,
Contact: Huntly House, 74 Huntly Street, ABERDEEN, AB10 1TD
Freephone: 08001214496. Email: [email protected]
They manage: Aberdeen City,Aberdeenshire & Moray
Watling House,Callendar Business Park, FALKIRK, FK1 1XR
Telephone: 0330 303 0023. Email: [email protected]
They manage: Edinburgh, East Lothian, Midlothian, West Lothian, Scottish Borders and Fife, Angus, Clackmannanshire, Dundee, Falkirk, Perth & Kinross and Stirling, Glasgow, East, Renfrewshire, Renfrewshire, East and West Dunbartonshire, Inverclyde, North and South, Lanarkshire, North, South and East Ayrshire, Argyll & Bute and Dumfries & Galloway, Orkney Islands and Eilean Siar (Western Isles).
List or registered builders for the help to buy Scotland scheme
- Avant Homes (Scotland) Limited
- BDW Trading Limited (Trading as Barratt Homes & David Wilson Homes)
- Bellway Homes Limited
- CALA Management Limited
- Charles Church Developments Limited
- Cruden Homes Group (Trading as Cruden Homes (East) Limited and Cruden Homes (West) Limited)
- Dawn Homes Limited
- Dundas Estates & Development Co. Limited
- Mactaggart & Mickel Homes Limited
- Miller Homes Limited
- Muir Homes Limited
- O’Brien Properties Limited
- Persimmon Homes Limited
- Robertson Homes Limited and Robertson Living Limited
- Springfield Properties PLC
- Stewart Milne Group Limited
- Taylor Wimpey UK Limited
- Tulloch Homes Limited
- Walker Group (Scotland) Limited
- Help to Buy (Scotland) Smaller Developers New Build scheme
- AA Aggregates Central Limited
- A. R. D. Properties Limited
- A. & J. Stephen Limited
- A&Y Homes Limited
- Abbey Construction (Scotland) Limited
- Aberkell Developments Limited
- Airlie Green Low Energy Homes SPV Limited
- AJC Homes Scotland Limited
- Alexander Duthie & Sons Limited
- Allan Water Developments Limited
- Andersons Joinery
- Andover Development Company Limited
- Andrew Sinclair Limited
- ARRIA Homes (Lanark) Limited
- Auberne Homes Limited
- B.H.C. Limited
- Balfour Beatty Investments Limited
- Ballagan Developments
- Bancon Group Limited
- Barony Developments Limited
- Barony Homes Limited
- Bertha Park Limited
- Bigg Regeneration Limited Partnership
- Bob Milton Properties Limited
- Boyle Builders (Scotland) Limited
- Braehill Developments Limited
- Broatch Construction Limited
- Building Craftsmen (Dumfries) Limited
- Burn Developments Limited
- C&S Ventures Limited
- C.V.O. Limited
- Caldwell Developments Limited
- CalMax Construction Limited
- Campbell Homes (Afton Braes) Limited
- Campion Homes Limited
- Carden (Buchan Braes) Limited
- Carlton Country Limited
- Carmichael Homes & Interiors Limited
- Casa Developments (Scotland) Limited
- Castle Homes (FR) Limited
- Cater Capital Investments Limited
- CCG (Scotland) Limited
- CCG Homes Limited
- CCM Homes (Scotland) Limited
- CHAP Group (Aberdeen) Limited
- Charles Hone
- City Vale Developments Limited
- Claymore Homes Limited
- Colaren Homes Limited
- Compass Building and Construction Services Limited
- Crest Homes (Scotland) Limited
- Cullross Limited
- Davmil Limited
- D.I.T.T. Construction Limited
- D.J. Laing Homes Limited
- D. McLaughlin & Sons Limited
- Davall Developments Limited
- Dickie & Moore (Old Cathcart) Limited
- Discovery Homes (Dundee) Limited
- Discovery Homes (Scotland) Limited
- Dormont Passive Homes (Scotland) Limited
- Drum (G3 Square) Limited
- DWS Building & Civil Engineering Limited
- Ediston Homes Sauchie Limited
- EK Land co Limited
- Elsrickle Limited
- Evantyr Properties Limited
- G.S. Brown Construction Limited
- GCS Developments (Scotland) Limited
- Glen Homes (Scotland) Limited
- Glenisla Developments Limited
- GLENMHOR DEVELOPMENTS LIMITED
- Grange Estates (Newbattle) Limited
- Green Pads Limited
- Guild Homes (Tayside) Limited
- H & H Properties (UK) Limited
- Hadden Construction Limited
- Hamewith Homes Limited
- Hayhill Developments Limited
- Heritage Developments (Ayrshire) Limited
- Hillfoot Homes (Property & Development) Limited
- Hope Homes (Scotland) Limited
- Hudson Hirsel LLP
- ICM Developments Limited
- Invertay Developments Limited
- Invertay Homes Residential LLP
- Ivanhoe Forth Limited
- J Smart & Co (Contractors) PLC
- Joe McColl Limited
- John Forrest Engineering Limited
- JR Homes (Blackburn) Limited
- Keepmoat Homes Limited
- Kindbuild Limited
- Kingston Residential Investments Limited
- Kinross Town Hall Limited
- Kirkwood Homes Limited
- KT Properties (Scotland) Limited
- Ladybank Homes Limited
- Langshaw Homes Limited
- Laurel Homes Limited
- Linen Quarter Damask Limited
- Linen Quarter Depot Limited
- Lochay Homes Limited
- Lovell Partnerships Limited
- M. & J. Ballantyne Limited
- Malcolm Allan Housebuilders Limited
- Martin Homes Scotland Limited
- Maven Ambassador Clackmannan Limited
- Maven Ambassador Renfrew Limited
- McCallan Homes Limited
- McCarthy and Stone Retirement Lifestyles Limited
- McGill & Co Limited
- McKernan Homes Limited
- Mellow Homes Limited
- Merchant Homes Limited
- Merchant Homes Partnerships Limited
- Milestone Developments (Ayrshire) Limited
- Milestone Developments (Dalry) Limited
- Milestone Developments (West Kilbride) Limited
- MM Miller (Wick) Limited
- Modern Housing New Homes Limited
- Monarch Conservatories Scotland Limited
- Mondial Property Developments Limited
- Morlich Homes Limited
- Mullberry Homes Limited
- Neacreath Limited
- Neil McGougan Limited
- Nixon Blue (Old Sneddon Street) Limited
- Norman MacDonald Limited
- Oak-Ngate Limited
- Ochilview Developments Limited
- Ogilvie Homes Limited
- Orbis Parcs Limited
- Orkney Builders (Contractors) Limited
- Oyster Homes Contracting Limited
- Panacea (Scotland) Limited
- Panmure Developments Limited
- Pat Munro (Alness) Limited
- Patterdale Properties Limited
- Pert Bruce Homes Limited
- Places for People Homes Limited
- Places for People Scotland Limited
- Places for People Shrubhill Limited
- Planview Limited
- Quale Homes Limited
- Quality Assured Property Maintenance Limited
- Rae Joinery Limited
- RAH Developments Limited
- RCK Developments Limited
- Realm Homes (Scotland) Limited
- Reiver Homes ‘a trading division of Story Contacting Limited’
- Robinson New Homes Limited
- Rosewood Homes and Properties Limited
- Rossleigh Developments Limited
- R S McLeod Developments Limited
- Salus Developments Limited
- SBAY-C SA(1)
- Scotia (Brechin West) Limited
- Scotia (Glenview) Limited
- Scotia (Highwood) Limited
- Scotia Homes Limited
- Scotia (Knockhall) Limited
- Scotia (Stratton) Limited
- Southvale Homes (Lanark) Limited
- Sparkle Berry Homes Limited
- Spectrum Properties (West) Limited
- Spindlehawk Limited
- St Mary’s Housing Limited
- Story Homes Limited
- Strathcarron Developments Limited
- Strathcarron Homes Limited
- Strathmore Homes (Scotland) Limited
- Stratstone Investments Limited
- Sunnyside Estate Limited
- Taylor Grange Developments Limited
- Taylor Homes (Scotland) Limited
- Teague Homes (UK) Limited
- The Docherty Property Partnership Limited
- Tranos (UK) Limited
- Tulloch of Cummingston Limited
- Turnberry Homes Limited
- Urban Union Limited
- Viga Developments Limited
- Viga Homes Limited
- Viga Homes (Dalmellington) Limited
- Waverley Tweed Limited
- WB Properties (Scotland) Limited
- Westpoint Homes (West) Limited
- West Coast Estates Limited
- Whiteburn Caerlee LLP
- WPH Developments (Mansionhouse) Limited
- Zero C Holdings Limited
How to get a help to buy mortgage in Scotland ?
If you want to get a help to buy mortgage in Scotland then you should speak to a help to buy broker who may be able to advise you on your help to buy mortgage Scotland options.
Use a Government scheme
Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.
Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.
Government schemes are not available to you if you are getting a buy to let mortgage.
The Government schemes include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire– similar to the above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
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.