New 5% deposit mortgage scheme could make it easier to get on the property ladder - what buyers need to know Claire Schofield.
Hawk Rise, Ledbury development
Since the launch in May of the NHS Deposit Contribution Scheme, Worcestershire developer, Barratt Homes West Midlands, have helped 45 NHS employees secure a new home.
Most home loans can fund up to 85-95% of the value of your property, which means you’ll need a minimum of up to 5-15% as a deposit. However, there may be benefits in saving a larger deposit. For example, if you borrow more than a certain level (commonly 80% of the value of the property you’re using the loan to buy), you might have to pay. If you put down 10% ($20,000 on the average home) or 5% ($10,000 on the average home), then you will be able to become a homeowner faster, since you won’t have to save as much cash.
The scheme sees NHS employees receive a 5% contribution towards their deposit, up to £15,000, to help them buy a new home as a thank you for their hard work during the COVID-19 crisis.
5 Percent Deposit Home Loans
The incentive has helped NHS workers across areas of Staffordshire, Shropshire, Oxfordshire, Worcestershire, Cheshire and Warwickshire with 45 properties reserved.
Having a first-time buyer 5% deposit means that your LTV would be 95%, so some call them 95% mortgages - smaller deposits elevate risk for the provider, who might wish to charge a higher rate of. Compound interest occurs when interest is added to the original deposit – or principal – which results in interest earning interest. Financial institutions often offer compound interest on deposits, compounding on a regular basis – usually monthly or annually.
The NHS incentive can also be used in conjunction with the government help to buy scheme, offering further support to those looking to purchase their first home.
5 Percent Deposit Mortgage Uk
Tanya Silk, Sales Director at Barratt Homes West Midlands, said:
“It’s brilliant to see NHS workers in Worcestershire are making use of the NHS Deposit Contribution Scheme. The National Health Service has worked incredibly hard during the COVID-19 pandemic and we are really pleased that the scheme is already benefiting those who deserve it the most.”
The developer has a range of properties available in Worcestershire at Henbrook Gardens, Stoke Prior, Bromsgrove.
Barratt Homes’ developments are now open on an appointment only basis, please call the sales line on 0333 355 8475 or visit the website Barrat Homes.
New Homes 5 Percent Deposit
“We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95 per cent of the value of the home – vastly reducing the size of the deposit. We believe that this policy could create two million more owner-occupiers – the biggest expansion of home ownership since the 1980s. We will help turn generation rent into generation buy.”said the PM.
In wake of the economic impact of the pandemic, this almost sounds too good to be true. Although there has been very little information provided about when this scheme will be introduced or how it will work, the announcement may provide some form of relief for young first-time buyers struggling to save up for a house deposit. When the scheme has been introduced we will update you with further advice and our experts will be here for you. Please follow Wolferstans Solicitors on social media where our legal experts will provide guidance in line with the latest updates and announcements.
5 Percent Deposit Houses
Here is what one of our experts have to say and some tips for you to prepare for the alleged new scheme: