A. The scheme you are referring to is called ‘NewBuy’ it enables would be buyers like yourself to buy a new home with a 95% deposit. This attractive scheme is great because it enables buyers to secure a brand new property with a small 5% deposit, as you know most lenders now are looking for at least 10 -15% deposit from a first time buyer at the very least, pricing many would be buyers out of the property market altogether. NewBuy is a new initiative which aims to help home-buyers who may have found themselves unable to move up or step onto the housing ladder, secure up to a 95% Loan to Value mortgage on new build properties from participating builders in England.
To qualify for NewBuy, properties have to be:
- New build – residential properties being sold for the first time or for the first time in the current form;
- Priced up to £500k – but there is no cap on income;
- Full ownership – NewBuy is not available for shared ownership or shared equity purchase;
- Primary homes – NewBuy is not available for the purchase of second homes, for investors or for buy-to-let purchases;
- This scheme only applies to capital repayment mortgages, not interest-only mortgages;
- You must not be receiving help with your deposit from a local authority or other public body;
- This scheme applies to England only; separate schemes are under consideration in Scotland and Wales.
New home buyers wishing to take advantage of the scheme will need to qualify for a mortgage with a mortgage lender in the usual way and be subject to the lender’s normal assessment criteria. The scheme will be operated by the home building industry and mortgage lenders – the banks and building societies – working in partnership with the Government. The scheme is designed to protect the lenders against losses in the unfortunate event of repossession, which is why they are prepared to make 90-95% mortgages available. This does not however change a borrower’s responsibility to repay the mortgage in any way.
For more information go to www.newbuy.org.uk