If you’re in regular employment and have saved some money towards a mortgage deposit, in theory you should be in the perfect position to buy a house. Unfortunately, careless decisions from the financial industry, as well as a crisis in global banking, mean that this might not necessarily be the case.

Your housing hopes and dreams

Many working people have found it difficult or impossible to obtain a mortgage since the 2008-banking downfall. This includes those who can prove that they can satisfy current mortgage repayments, but don’t have sufficient funds saved for an inflated deposit. An article in the Daily Mail highlights some of these difficulties. Help is at hand, and the Government has introduced the Help to Buy scheme to redress this situation. The Money Advice Service clarifies the Government’s Help to Buy Scheme, which is aimed to help those who are financially secure, but can’t raise an astronomical 25% mortgage deposit.

The Help to Buy Scheme

By January of this year, the UK government website revealed that 750 current homeowners had participated in the Help to Buy Scheme. This number is growing. Essentially, this scheme has been set up to help those who can prove eligibility for a mortgage, but can’t muster the funds required by the current lending system to put down a deposit. All the home saver will have to find under the Help to Buy scheme is 5% of the house price, as a deposit, and the Government will underwrite the remaining 20% to the lender. The loan is between the Government and the bank/building society, and not the individual borrower.

A Two Part Project

The cornerstone of this particular government policy will subsidise the lender, which in turn will help the borrower, and allow them to buy a house up to the value of £600,000. The equity loan and the mortgage guarantee scheme are the main components of the Help to Buy legislation. Both will guarantee the lender, and mean that those trying to buy a house won’t have to find 25% of the asking price of a house as a deposit. The mortgage guarantee scheme covers both old and new houses; whereas, the equity loan scheme will help those that want to invest in a new build. Both parts of the scheme are designed to help first time buyers and those who already own property but need to find additional finance in order to secure their next house move.

Help for all

As long as you are looking for a house for your own occupation – you cannot use the scheme for a buy to let project – you are eligible to apply to your proposed lender for participation in the scheme. You will still have to fulfil all of the current mortgage criteria. At least you won’t have to find an additional 25% of the asking price in order to secure the house of your dreams.