If you are dentist or doctor who is fed up with renting and are looking to purchase your first home, congratulations – you are about to enter a new stage of your life and make one of the biggest financial commitments. It is always wise to undertake thorough research before you make the decision to buy a property. One of the most important decisions to make is deciding which scheme is the best for you.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
It is crucial to get this right if you are a first time buyer who is buying on your own. We’ve put together some different options that can help you acquire your first home.
Help to Buy ISA
If you are looking to increase the amount of savings you can use for a deposit, a Help to Buy ISA may be a good option. This is because the government will boost your savings by 25%.
For every £200 you put into the ISA you will receive a government bonus of £50. The maximum bonus you can receive is £3000.
The ISA is available from leading banks and building societies.
Shared ownership
Shared ownerships schemes are designed for first time buyers who don’t have enough money to buy a property outright. These schemes are very useful for people who want to buy in areas where property prices are high, such as London and the South-East.
The scheme allows you to buy between a quarter and three-quarters of a property, with the option to purchase more later on.
To qualify for a shared ownership scheme you must meet certain criteria:
- Your household income must be £80,000 a year or less, outside of London.
- You are a first-time buyer or a previous homeowner, but can’t afford to property now
- Or, you are someone who is currently renting a property from the local authority or a housing association
All properties offered through a shared ownership are on a lease basis only.
Help to Buy – equity loan scheme
The government loans you up to 20% (from February 2016 this was increased to 40% for buyers in the Greater London area) of a newly built property and you are required to put in 5% cash deposit with the remainder 75% available through a mortgage.
For the first 5 years of living in the property, you don’t pay interest on the 20% loan.
This scheme is only available on newly built properties in England. The scheme is on offer until 2020.
Lifetime ISA
The Lifetime ISA (LISA) came out earlier this year and is another way to help first time buyers onto the property ladder. It allows you to save up to £4,000 per year, with the government contributing an additional 25%, up to a maximum of £1,000.
The good thing with the LISA is that interest is accrued monthly, building your pot a little quicker.
Funds can be withdrawn at any time after one year from opening the account, to contribute to a deposit on their first home.
Else, it can be saved and used for retirement to draw anytime after age 60.
Terms & conditions apply, so read our useful Guide with more information.
For competitive first time buyer mortgages
If you are planning to buy your first home, ensure you have the best mortgage. Speak to Chris about your options and to get a competitive, independent quote:
Tel: 01403 780 770