People looking to apply to the Help to Buy scheme have just weeks before the scheme winds down.
The Government initiative is designed to help people get on to the property ladder.
The scheme will stop accepting new applications on 31 October 2022 and will end permanently on 31 March 2023.
How does the scheme work?
The scheme enables first-time buyers to purchase a new build property, valued up to regional cap, with just a five per cent deposit. In the West Midlands, the cap is set at £255,600, and £600,000 in London.
This is then topped up by the Government with a 20 per cent equity loan, rising to 40 per cent in London, which is interest-free for the first five years.
The Government says to apply, you must reserve your home with a home builder registered with the scheme and submit your Property Information Form (PIF) to your Help to Buy agent.
The legal purchase of the home must be completed before the scheme ends on 31 March 2023.
On the sale of your home, you will need to pay back either the loan you took out or the percentage of the property value you borrowed. So, if you were to borrow £20,000 through the Help to Buy Scheme towards a £100,000 property now, you would have to pay back £40,000 if you were to sell in a few years’ time £200,000.
You would also have to repay on paying off your mortgage or at the end of the loan term, which is usually 25 years.
What are the key dates?
Your home builder must have finished building your home by 31 December 2022 so it’s ready to live in. This is called practical completion.
The legal purchase of the home must be completed by 31 March 2023 and you must have the keys by 6 pm at the latest on that day. If you don’t complete by this date, you will not be eligible for the equity loan.
What if the building is not finished?
If your homebuilder cannot finish your home in time, they must return your reservation fee to you in full.
Also, if you have exchanged, your homebuilder must unconditionally release you from the contract and return your deposit. Your professional property adviser can help you with this.
What else do I have to pay?
There are the usual related legal and financial advice costs, but otherwise, there are no other costs.
Since it was first launched in 2013, more than 350,000 people have used the scheme.
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