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How to Buy a Home in Manchester With a 5% Deposit | Mortgage Market Update 02/10/20

How to Purchase a Property With a 5% Deposit | Shared Ownership UK | Help to Buy Equity Loan

The effects of the coronavirus have heavily hit the mortgage market and it’s still recovering. The whole economy has been affected; The impact has impacted everyone differently in some way or another.

At the moment, lenders are only offering 90% mortgages (10% deposit), which can prove quite expensive, particularly to First Time Buyers looking to purchase a property in Manchester.

There are ways, to get onto the property ladder with a 5% deposit. With our help, we thought that it would be within your best interests to explain to you how this can get achieved using the Help to Buy Equity Loan or the Shared Ownership scheme:

Help to Buy Equity Loan

With the Help to Buy Equity Loan, you can put down a deposit of 5% or more, and then the government will top up this percentage so that you have a total of a 25% deposit.

Whatever percentage that they loan you is the Equity Loan, which will also need to get paid off along with your mortgage. During the first 5 years of living in your house, this loan will be interest-free, however, if you don’t manage to pay it off within these five years, you will start receiving interest on it starting at 1.75%.

As you can see, it’s still possible to obtain a mortgage with a 5% deposit through the Help to Buy Equity Loan scheme. To qualify for the Help to Buy Equity Loan scheme, you need to know that:

  • You can only be buying a newly built property.
  • The maximum purchase price is £600,000.
  • You can only own this property.

You have to be buying the property for purely residential use only and not as a Buy to Let.

Do you fit the requirements?

If you think that the Help to Buy Equity Loan scheme is right for you? Then now would be the perfect time for you to start your Help to Buy mortgage journey. You have two options one is doing everything on your own, the other being approaching a Mortgage Broker in Manchester.

Getting Help to Buy Mortgage Advice in Manchester could take all of the stress that comes with mortgages off your back. An Advisor will walk you through the whole process and tell you precisely what is going on every step of the way.

Shared Ownership

The Shared Ownership scheme can also benefit you get onto the property ladder with a 5% deposit. This scheme lets you purchase a percentage of your mortgage and then pay the rest on rent.

Additionally, this percentage usually is anywhere between 25%-75%. As you only own part of the property, you share the property with the government.
Like the Help to Buy Equity Loan scheme, you have to qualify for the Shared Ownership scheme and meet specific requirements. Here we listed the rules that you will need to adhere to qualify:

  • You can’t have a household income of more than £80,000 per year
  • Can only access if you can’t get a mortgage any other way
  • You need a good credit history
  • You can only own this property

If you are struggling to obtain a standard mortgage, the Shared Ownership Scheme could be your best option. If you want Shared Ownership Mortgage Advice in Manchester, you should approach a Mortgage Broker.

They will tell you everything about the scheme and see if you qualify for it. Talking to a Mortgage Broker in Manchester could say to you exactly what you need.

Summary

Even though your options may be limited when trying to get a mortgage with a 5% deposit, these two schemes could be great options to consider. Both methods are still holding their weight in the mortgage market.

Whether it’s the Help to Buy Equity Loan scheme or the Shared Ownership scheme, we can help with both.

Firstly we will check if you qualify for a scheme and whether it will suit your personal and financial circumstances or not. If everything looks good, we can get your mortgage journey started.

Getting Mortgage Advice in Manchester could be within your best interests, especially in this day and age.

The mortgage market is up in the air at the moment, so getting advice will be extremely beneficial, especially if you are a First Time Buyer in Manchester. Feel free to get in touch so we can discuss your mortgage options.

Manchestermoneyman.com & Manchestermoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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