First Time Buyers Guide– Residential Mortgage
First Time Buyers Guide–
- 2 bedroom apartment for sale £330k (Home buy)
- Colindale Gardens,
Colindale Avenue, Colindale, London, NW9
- 2 bedroom apartment for
- Canaletto Court,
Neasden Lane, London, NW10
- Shares from £93,750
(25% share price of £375,000 for a two bedroom home). (shared ownership)
London Help to Buy
This is an extension of the existing Help to Buy
equity loan scheme to help Londoners get on the property ladder.
Who can do it? Anyone
wanting to buy in London with a 5% deposit.
House price: Properties in
Greater London costing up to £600,000.
Property type: New build.
Government lends you up to 20-40% of the property
value (interest-free for the first five
years). This substantially reduces the monthly costs in the first five
years and would give access to cheaper mortgage, as you only need to borrow 60%
of the value from the lender.
Help to Buy: Shared ownership
Who can do it?
- Non-homeowners, including
first-time buyers and those who previously owned a home, who earn £80,000 a
year or less (thresholds are up to £90,000 in London).
- You’ll need to have enough
savings to cover a 10% deposit of the share you’re buying, and to cover moving
costs, stamp duty, solicitors’ fees, etc. You’ll also need to find a mortgage
lender that is willing to lend on shared ownership properties.
House price: Any.
Options to Buy
- Shared ownership
Buy: a 25% share (75%
owned by a housing association). That works out as:
Housing association share = £150,000
Your share = £50,000
Your deposit = £5,000 (10% of the value of your share)
Mortgage required = £45,000
You pay subsidised rent (and usually a service charge) on the share you
don’t own, which will be less than the market value. If subsidised rent on the
property is £100/week, but you own a 25% share, you’d pay £75/week.
Mortgage fees include:
Stamp duty, insurance, service charge. mortgage broker fees,
adviser fees, valuation fees, arrangement fees and more.
- 1ST Time Buyer regular outright purchase
Monthly payment: £1.5K to £2K
to Buy Equity loans
Deposit: 5% of the sale price
government lends you up to 20% of the sale price.
You borrow the rest (up to 75%) from a mortgage lender, on a repayment basis