Help to Buy Equity Loan explained
What is Equity Loan?
• The Help to Buy Equity Loan is an interest free loan from the Government for the first 5 years living in a property and is paid directly to the Homes and Communities Agency (HCA).
• An Equity Loan of up to 40% is available using Help to Buy London and up to 20% outside of London.
• The loan is available to qualifying buyers purchasing a new build property up to £600,000 through a participating housebuilder.
Is the Equity Loan right for me?
• This must be your only home, you cannot rent out your existing home and buy a second home through Help to Buy.
• You must be either a UK resident, first time buyer or just looking to move home.
• A minimum of 5% deposit of the property purchase is required.
• The loan cannot be used by buy-to-let investors or those looking to rent out a second property.
How it works?
•A mortgage broker assesses your affordability using the Help to Buy calculator.
• You’ll then need to complete a Property Information Form (PIF) and send this to your Help to Buy sales agent, who will issue your broker with an Authority to Proceed (ATP).
• On receiving the ATP, the mortgage broker can submit the full mortgage application to the mortgage lender.
• Once an offer is issued and your solicitor is able to exchange contracts, they will apply to the Help to Buy agent for an Authority to Exchange (ATE). This is valid for 4–6 weeks.
• The Authority to Complete (ATC) is issued upon exchange of contracts and is valid for 6 months and then you can complete on the property when it is built.