Last week, James blogged about the expanded Help to Buy scheme. You may have noticed that the scheme is growing into a huge headline story, as ministers debate and commentators discuss. In a nutshell, the government is offering a guarantee to lenders (up to 15%) on mortgages with low deposits (5% of the property’s value). The idea is to help more people without big deposits to buy a home.
There is one thing to bear in mind as a property story gets bigger and louder: don’t panic. Now might indeed be a great time for you to buy a house, but it is very important to compare a wide range of mortgage products. The best offer might be a Help to Buy mortgage. But it might not, and the scheme will be there in a few weeks after you’ve looked at your options.
Despite all the noise, not much has changed in a week, except that there are a couple more lenders (Virgin Money and HSBC) planning to start offering mortgages within the scheme later in the year. The more different mortgage products to choose from, the better!
As an example, if you can afford a 10% deposit, you will have a wider range of mortgages on offer, with different balances of interest rates and fees. These won’t be part of the Help to Buy scheme. For other people, with the guarantee to offset some of the risks, your best interest rate might indeed come from a scheme product.
We’ve talked before about the complete cost of buying a house being confusing, and the Help to Buy scheme doesn’t make it simpler. So, why not talk with us about your own situation? We love to discuss the details.