We know that it can be really hard to get on or move up the property ladder so we also know that just a little help can make all the difference. Here are just a few options that might help you get on, or move up, the property ladder.
Help to Buy
In 2013 the Help to Buy schemes were launched in Scotland. The schemes have so far proven to be very popular as they can help you to purchase a home with just a 5% deposit. There are two different schemes that you need to know about:
1. Help to Buy: mortgage guarantee scheme
This is a special type of mortgage that lets you buy a property on the open market (i.e. not just a new build home) with just a 5% deposit and the government and the lending bank will guarantee up to the next 15% of the property value. It’s a great way to get moving with a small deposit, without entering into shared equity or ownership.
2. Help to Buy (Scotland): equity loan scheme
The equity loan scheme can help you to buy a new build home with just a 5% deposit with the Scottish government taking an equity stake of up to 20% in your new home. This should allow access to much more competitive interest rates for your mortgage making it an attractive option.
For more information about Help to Buy read our guide or speak with an HSPC Mortgages financial adviser. You can call to make an appointment on 01463 231173.
Shared equity and shared ownership
The terminology used for the types of schemes that will help you if you've only got a small deposit can be really confusing. For example what's the difference between shared ownership and shared equity? Making the right decision can have a big impact on your future options if and when you decide to move home.
Shared equity, for example, means you own 100% of the property but that a third party has an equity stake in it - they help you to buy the property but they get the same proportion back from the price you receive when you come to sell. Shared ownership on the other hand means you own part of the property and the other part is owned by a third party. There may also be additional occupancy charges levied. Understanding the differences between these various terminologies is really important.
The Scottish Government is committed to supporting home ownership in a balanced and sustainable way by helping people on low to moderate incomes to become home owners, where that is affordable for them. Its Low-cost Initiative for First Time Buyers (LIFT) brings together several ways to help households access home ownership.
The details of each scheme vary based on the criteria set by the organisation behind it.