Buying a home in the UK requires significant investment, making it challenging for most people to purchase a property outright. As such, several financial deals exist to help home buyers realize their dream without significant upfront costs. In this article, we’ll take a comprehensive look at the various financial deals available to help UK homebuyers.
Deposit Contribution
Many financial institutions offer incentives like deposit contribution to encourage homebuyers to invest in their properties. With this deal, the banking institution contributes some percentage towards your deposit while reducing the amount you need to contribute. Sometimes the amount contributed by the bank is a fixed percentage of your deposit, or they may offer a cash bonus.
Help to Buy
Help to Buy is a government incentive designed to help first-time homebuyers to get onto the property ladder. Help to Buy schemes assist homebuyers with an equity loan which covers up to 20% of the property’s cost, while you provide a cash deposit for the balance and secure a mortgage for the remaining portion. This scheme can also help hopeful homeowners who have previously owned homes to secure a new property.
Shared Ownership
Shared ownership involves sharing a property’s ownership with a housing association which means the individual buys a portion of the property and rents that portion from the housing association. This scheme is for the first-time buyers who cannot afford to buy a property outright. The scheme allows individuals to buy a share of the property they can afford, with the option to purchase more equity as they go along. Monthly rent payments are due on the portion of the property that is not owned, to the housing association.
Savings
A vital part of making the home-buying process as cost-effective as possible is having enough savings to pay for the transaction’s costs. This could be everything from conveyancing fees to providing essential cash deposits. By saving before committing to property transactions, buyers avoid the excess of credit costs that can come with borrowing money.
Lifetime ISA (Individual Savings Account)
A lifetime ISA is another scheme designed for individuals buying their first home. The government presents an attractive deal to help you save money for deposits and mortgage expenses. With this account, savers can contribute up to £4,000 annually, which the government will match with a 25% bonus. This account offers tax-free interest rates and penalty-free withdrawals designed for purchasing your first home.
Conclusion
The financial deals available to homebuyers in the UK vary, so it’s essential to research thoroughly before making a decision. Setup time with a reliable mortgage broker to understand the options available to you, and which could benefit you the most. With a helpful financial incentive and an awareness of the options available, anything is possible. Whether you’ve been saving for years or scoping out the market for good deals, there’s a lot of support available to help you become a homeowner in the UK.