Help To Buy
Help to Buy is the name of a government programme in the United Kingdom that aims to help first time buyers, and those looking to move home, purchase residential property.
It was announced in Chancellor of the Exchequer George Osborne’s 2013 budget speech, and was described as “the biggest government intervention in the housing market since the Right to Buy scheme” of the 1980s. It is an extension of a previous programme called FirstBuy that was aimed solely at first-time buyers. Help to Buy has itself been expanded and extended. We have Forces help to Buy until the end of 2019 too.
You should remember to include the costs of buying such as solicitors, survey, advice and mortgage broker fees. You should take into account what would happen to your monthly payments if interest rates were to rise. It would be important not to overstretch your budget. If you do, the result could be you find that with a sharp increase in interest rates, your lifestyle would suffer significantly or worse. You may also be repossessed, if you have not taken into account these changes.
Choosing the correct mortgage
Mortgage rates change and availability of different types of mortgages change with markets. There are different types of mortgage available including fixed rate over different periods, rates that track the Bank of England base rate, discount rates and other types. It is important to take into account your situation, your potential for increases in income, inheritance or other changes that could have an effect on your mortgage planning.
Repaying your mortgage
Repaying your mortgage early, or making overpayments means saving on interest over the period of your home buying term, hence making the house cheaper for you in the longer term.
An easy way to repay your mortgage quicker than set out in the schedule is to overpay slightly each month. Over payments are allocated to capital and so the interest burden is reduced faster. For example, a £150,000 mortgage repaid over 25 years at 3% interest rate throughout the term would cost £711. By paying £66 more each month, the mortgage would be repaid in 22 years and if the repayments were increased by £121 per month, the mortgage would be repaid in 20 years.