Prospect Homes is a registered house-builder with the government-backed Help to Buy equity loan scheme, allowing you to purchase a beautiful new Prospect home with only a 5% deposit required. Help to Buy provides an equity loan of up to 20% which is interest-free for 5 years – it means that you only need to arrange a 75% mortgage to go with your 5% deposit. Help to Buy is currently available on selected homes at the following developments:
Buckshaw Central in Chorley
Kingswood in Prestwich
Riversleigh in Warton
Maine Place in Manchester
Pennine View in Denholme
Strawberry Fields in Gisburn
What is Help to Buy?
Help to Buy provides equity loan assistance to home buyers from the Homes and Communities Agency (HCA). It is available to all home buyers (not just first time buyers) who wish buy a new home from a registered Help to Buy house-builder, but may be constrained in doing so, for example as a result of deposit requirements. Up to a maximum of 20% of the purchase price is available to the buyer through an equity loan funded by the Government through the HCA. Help to Buy will run from April 1st 2013 until March 31st 2016 (or earlier if all of the funding is taken up).
How does it work?
Help to Buy enables you to take out a mortgage on which you make repayments in the normal way. Your mortgage lender is likely to require that you contribute a deposit and your mortgage and deposit must cover a combined minimum 80% of the total purchase price. The rest of the purchase price will be paid for with an equity loan from the HCA.
As a result of providing this assistance, the HCA has an entitlement to a share of the future sale proceeds equal to the percentage contribution required to assist your purchase. For the first five years of Help to Buy home ownership there is nothing for you to pay on the amount that the HCA contributed to your purchase.
After five years, the equity loan will be subject to a fee (collected from you on behalf of the HCA by the Post Sales Help to Buy Agent) of 1.75% per annum on the outstanding amount of the equity loan. From the fifth anniversary of the loan this fee will increase each year by the increase (if any) in RPI plus 1%.
How to buy a Help to Buy – equity loan home
For information on how to purchase via Help to Buy please download the Help to Buy Buyer’s Guide