Author (Ranjith143). Submitted on Thu, 10 May 2012
Stepping on to the property ladder has been something that’s been playing on my mind a lot. But years have passed and, as our family grew bigger, we struggled scraping together a 20-25 per cent deposit to apply for a mortgage. Whilst looking around at mortgages, a few new sources linked me to a list of loan schemes to help buyers fund their new home. I never knew the First Buy Scheme existed until then.
The First Buy Scheme is a government loan equity scheme which is specially designed to help first time buyers buy their first home. The scheme is open to first time buyers and council or housing association tenants whose household earns £60,000 a year or less, or who can’t afford to buy a home in their area. The Scheme can provide first time buyers with a 20 per cent equity loan; which is provided by the government and the developer. There are currently over a hundred property developers signed up to the First Buy Scheme throughout Britain. But I particularly found a lot of useful information on the Berkeley Group website.
Most mortgage lenders expect a 20 to 25 per cent deposit. But as I found a property using the First Buy Scheme, their 20 per cent equity loan enabled me to successfully apply for a 75 per cent mortgage with only a 5 per cent deposit on my part. Our dream house’s purchase price was set at £200,000, and as the home was available through the First Buy Scheme, the government and property developer provided me with a £40,000 equity loan; Leaving me in charge of providing an incredibly low deposit of £8,000 and a mortgage cover of £152,000 on the rest of the property.
The home’s title is in my own name which enables me to sell the property at any time. And as a equity loan is based on the total value of your home, the amount I owe will fall and rise together with our new home’s property value. Buying my family’s new home through the First Buy Scheme has been an incredible help and opportunity. Since moving into our dream house the mortgage payments are only slightly larger than our previous rent but I’m finally relaxed and at ease knowing my family has their own home.
Berkeley Group: Berkeley Group offers FirstBuy, a shared equity scheme which provides eligible first time buyers with a loan to cover up to 20% the price of a property