Help To Buy Wales
JBM Mortgage Brokers can help you with the Help to Buy Wales scheme. For more information on the Help to Buy have a look at the information below. Help to Buy – Wales allows eligible purchasers to buy new-build homes with assistance from the Welsh Government in the form of a shared equity loan.
What does this mean in practice?
Help to Buy – Wales shared equity loans are available to both first-time buyers and home movers wishing to purchase new-build homes worth up to £300,000. With Help to Buy – Wales, buyers won’t be able to sub-let their home. With Help to Buy – Wales:
buyers need to contribute a deposit equal to 5% of the property price.
the Welsh Government (through Help to Buy (Wales) Ltd) will fund a shared equity loan for up to 20% of the purchase price.
buyers will then need to secure a mortgage to cover the remaining balance.
|For a property worth £200,000||Amount||Percentage|
|Shared equity loan||£40,000||20%|
If in the future the home in the table above sold for £210,000 the buyer would get £168,000 (80%, based on their mortgage and the cash deposit) and pay back £42,000 on the shared equity loan (20%). The buyer will pay off their mortgage using the proceeds of the sale and will then repay the Help to Buy -Wales shared equity loan.
Are there any fees attached to the shared equity loan?
From the time a buyer receives the shared equity loan they will be charged a small administration fee of £1 per month. Then, in the 6th year, they’ll be charged interest of 1.75% per annum of the original shared equity loan amount. After this, the interest will increase every year.
This increase is worked out by using the Retail Prices Index plus 1%. All buyers will be contacted before the shared equity loan interest starts and they’ll also be sent a statement about their shared equity loan each year. The fees do not count towards paying back the shared equity loan. Further details of the Help to Buy – Wales shared equity loan can be found in the below guidance document. Information sourced from www.helptobuywales.co.uk