10 Jun The 95% mortgage guarantee scheme has arrived
You may remember that in The Budget Statement for 2021 the Chancellor announced a number of extensions and new schemes to help the property market return to normal over the next 6-12 months. With the extension of the Stamp Duty Holiday, we saw an influx of people looking to get their transactions completed before the end of June to take full advantage of the potential savings.
Now, there’s more good news for first time buyers AND existing homeowners alike. A new, government-backed mortgage guarantee scheme has been launched which could give more people the ability to get onto the property ladder.
If you’re looking for a property in the area, make sure you give the leading estate agents in Colnbrook a call on 01753 683000 or email us and we’ll help you find your next home.
New Mortgage Scheme
The recent lockdowns made many high street lenders somewhat nervous and so many high loan to value mortgage products were removed from the market.
These products are traditionally most utilised by first time buyers who might not have access to large deposits. This new scheme which runs from April 2021 to December 2022, aims to help in these situations.
How does it work?
Essentially the Government will guarantee a portion of the loan to the mortgage lender if the borrower is unable to make the repayments. This increases lender confidence and makes more money available to more potential home owners.
A 95% mortgage refers to the amount of the property’s value which is being paid for with borrowed money. The remaining 5% will be paid by the borrower as a deposit to secure the mortgage product.
Who is it for?
The new scheme is for anyone looking to buy a home in which to live. In other words, you will not be able to buy a property on a buy to let basis.
So, if you are an existing home owner looking for your next step, or a first-time buyer looking to get on to the property ladder, you will be eligible for one of these mortgage products.
It is important to note however, the same affordability criteria checks will be made by any lenders before you are accepted for the loan – this includes a credit check; your credit history will now need to be excellent.
If you have been part of the furlough scheme you might want to wait until you are back in full-time employment before applying. With furlough still being a relatively new concept, lenders will need the confidence that you are employed and can afford repayments regardless of the government guarantees.
There are many mortgage products available from a number of high street lenders so make sure you shop around. Alternatively, you could speak to a mortgage adviser, give us a call and we’d be happy to introduce you to one of our trusted partners.
For more information on the scheme, visit gov.uk.
Contact Us
If you are looking to move to this are, we are the leading independent estate agents in Colnbrook and are location experts. So, contact us on 01753 683000 or email us. You can also follow us on Facebook, LinkedIn and Instagram.