Exciting news was received over the weekend, for prospective first-time buyers and those who would like to move home, but only have a deposit of 5%. It appears the Government is going to announce a new 95% mortgage scheme in this week’s budget.
We still await full details of the scheme, but early news is telling us, that it will launch in April and will allow both first time buyers and home movers to buy a property up to £600,000, whilst putting down just 5% deposit, that being £5,000 per £100,000 borrowed.
For example, with a purchase price £200,000 – the deposit would be £10,000.
With people struggling to save and savings interest rates being low, a scheme is needed to get people on to the property ladder. The Governments plan is to turn ‘generation rent’ into ‘generation buy’, although they also need to meet targets of building affordable homes to allow people to purchase.
It will be interesting to see which lenders take up this scheme with the Government and what the lending criteria will be. Some lenders already offer 95% mortgages, when the help of a ‘guarantor’, typically a parent, adds security and backing. Lending will still be subject to the normal assessment of affordability, sustainability, and credit checks.
Even if you have bad credit or a low credit score, Clever Mortgages can look at options for you and will find a lending solution if there is one available.
Along with this, we could also see the Stamp Duty Land Tax holiday extended by 3 months, again, we wait further details to see who may benefit from this extension.
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