8th November 2018
In the autumn budget presentation that took place last Monday, it was announced that a new help to buy equity loan scheme will be launching in April 2021, when the current one is set to end.
‘New’ might not be the correct phrase as what it really seems to be is a revision of the current help to buy equity loan scheme in which the Government lends you up to 20% of the cost of a new build home, so you only need a 5% cash deposit and a 75% mortgage to make up the total purchase price.
The revised version simply includes regional price caps whereby the loan amount you can borrow will be capped in line with the current forecast for first time buyer prices in your area. The maximum is set at £600,000 and is of course London, whereas the lowest price cap sits at £186,100 in the North East of the country.
Great news for first time buyers of shared ownership homes in England and Northern Ireland – you won’t have to pay any stamp duty on the first £300,00 of any home that costs up to £500,000!
In November 2017 the Government announced stamp duty relief to all other first time buyers bar those purchasing shared ownership properties. Rectifying this the Government has agreed to backdate the offering to all those who bought shared ownership properties after the 22nd of November 2017.
Securing a mortgage on your first home and participating in the Government’s help to buy scheme can feel like a minefield if you are a Contractor, but you don’t need to worry. The help to buy schemes are available to you even if you aren’t paid conventionally.
What’s important when securing a mortgage and first home as a Contractor is to make sure that you work with Contractor friendly lenders and, even better, a specialist who knows just how to package your case. It’s not that it can’t be done – it’s just a matter of knowing how.
You’ll simply need to provide evidence of your contracting income (via your current and most recent signed contract and your bank statements) and the lenders will assess your affordability and the amount you could borrow as a result. In the simplest terms, they take into consideration your income and your outgoings and, as a rough guide, you can look to borrow anywhere from 3 to 5 x your annual gross contract income.
For answers to FAQs from Contractors looking to secure their first home, especially in light of the Autumn budget, have a read of this or get in touch and we’ll book you an appointment with one of our expert advisers.
All content is accurate at the time of publication
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