Is Remortgaging a Help-to-Buy Property an Option?
Help-to-Buy programs, which provide low-deposit mortgages and government-backed equity loans, have proven to be a popular choice for many first-time purchasers trying to climb the housing ladder. However, many homeowners might experience higher monthly mortgage payments as the initial five-year interest-free period ends. Remortgaging is a choice to think about, but what about houses that are part of the Help-to-Buy program? This blog post will examine the viability of remortgaging a Help-to-Buy property and what you should consider before deciding.
Through the program, the government offers equity loans of up to 20% (or 40% in London) of the property’s value to assist buyers in obtaining a mortgage with a cheaper interest rate. The equity loan is interest-free for the first five years; after that, interest is charged at 1.75%, increasing yearly by the inflation rate plus 1%. A new construction home with a purchase price of up to £600,000 is required to qualify for the program. Additionally, the buyer must be the sole owner of the property at the time of purchase.
Let’s Begin by Understanding Help-to-Buy Scheme:
The government’s Help-to-Buy program aims to make it easier for first-time buyers and people who are moving into new homes to buy a new home with as little as a 5% down payment.Through the program, the government offers equity loans of up to 20% (or 40% in London) of the property’s value to assist buyers in obtaining a mortgage with a cheaper interest rate. The equity loan is interest-free for the first five years; after that, interest is charged at 1.75%, increasing yearly by the inflation rate plus 1%. A new construction home with a purchase price of up to £600,000 is required to qualify for the program. Additionally, the buyer must be the sole owner of the property at the time of purchase.
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