Specialist low deposit and Help to Buy mortgages are designed to help first-time buyers and those with smaller deposits access the housing market. These schemes can provide a path to homeownership with as little as a 5% deposit.
Application Process:
Determine Your Eligibility: Check if you qualify for Help to Buy or a low deposit mortgage scheme. First-time buyers and those purchasing new-build homes are often eligible.
Get a Mortgage Agreement in Principle: This will give you an idea of how much you can borrow and if your deposit size is sufficient for the scheme.
Submit Your Application: You’ll need to provide details of your income, deposit, and the property you intend to buy. If applying for Help to Buy, you’ll also need to complete the government’s application process.
Affordability Assessment: The lender will ensure you can afford the mortgage repayments and assess your eligibility for the Help to Buy equity loan or shared ownership scheme.
Receive Your Mortgage Offer: If approved, you’ll receive an offer, allowing you to proceed with the purchase of your new home.
Factors Lenders Consider:
Deposit Size: With a low deposit, lenders may charge a higher interest rate or require additional financial checks to ensure affordability.
Eligibility for Government Schemes: For Help to Buy, the property must meet specific criteria, and you’ll need to follow the scheme’s guidelines.
Affordability: Lenders will closely assess your income and outgoings to ensure you can manage the mortgage, especially with a smaller deposit.
Credit History: Even with a small deposit, lenders expect a good credit score to minimise risk.
Top Tips
Check Government Schemes: Explore schemes like Help to Buy or shared ownership to maximise your purchasing power with a smaller deposit.
Improve Your Credit Score: A strong credit score can help you secure a better rate, even with a lower deposit.
Factor in Additional Costs: With Help to Buy, remember you’ll eventually need to repay the equity loan, so plan for this in the future.
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