The First Homes Scheme was started by the government to help people buy their first home. This scheme offers different types of mortgages and other financial assistance to help people get onto the property ladder.
Buying your first home is a significant milestone, and the journey to homeownership can be both exciting and daunting. One of the key aspects of this journey is understanding the various mortgage schemes available , particularly the First Home Scheme Mortgages. This scheme is designed to make homeownership more affordable for first-time buyers, and understanding how it works can be crucial in your home-buying journey.
In this article, we will explore the topic in detail and answer frequently asked questions, such as
What is a First Homes Scheme Mortgage?
What are the benefits of getting a mortgage under first homes scheme?
What is the eligibility criteria for the First Homes scheme?
How We Work
1: We contact you and take down your details, income outgoings, name, address etc.
2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.
3: You upload the documents and information needed via our channel our online portal.
What is a First Homes Scheme Mortgage?
The First Homes Scheme is a plan by the government in England to help people buy their first homes. It does this by offering a big discount, between 30% and 50%, on the price of the property. The property can be brand new, built by a company, or a house that was bought as part of this scheme before. The main goal of the First Homes Scheme is to make it easier for people to own their first property.
If you are a first-time buyer, we would suggest you contact a mortgage broker to help you with your mortgage application.
What are the benefits of getting a mortgage under the First Homes scheme?
The First Homes Scheme offers several benefits, making it an attractive option for first-time home buyers. The most significant advantage is the affordability it provides. The scheme offers discounts of up to 50% off the price of a home, which can translate into substantial savings for first-time buyers. This means that buyers can secure a mortgage for a lower amount, reducing the financial burden and making the dream of owning a home more achievable.
Moreover, the scheme is designed to maintain affordability in the long term. The discount applied under the First Homes Scheme is secured for future sales, meaning that when the time comes to sell, the property must be sold to other first-time buyers at a discounted rate. This ensures that the property remains within reach for first-time buyers, promoting a more equitable housing market.
Another benefit of the First Homes Scheme is that it can make the mortgage application process more straightforward. Since the mortgage amount needed is lower due to the discount, first-time buyers may find it easier to meet the lending criteria set by banks and other financial institutions. This can make the process of securing a mortgage less daunting and more accessible.
Finally, the First Homes Scheme can also provide a sense of financial security. By reducing the mortgage amount, the scheme can lower monthly repayments, making it easier for homeowners to manage their finances. This can provide peace of mind, knowing that homeownership won’t strain their budget or put them at financial risk.
What is the eligibility criteria for the first homes scheme?
To qualify for the First Homes Scheme, you need to meet certain requirements. You should be at least 18 years old and be purchasing a property for the first time, meaning you’ve never owned a home before. You also need to be capable of obtaining a mortgage that covers at least half the cost of the property you wish to buy.
Your household income also plays a role in your eligibility. If you’re purchasing the property as part of a household, the combined income should not surpass £80,000. However, this limit rises to £90,000 if you’re based in London.
Additional eligibility conditions may be set by local councils. For example, some councils might give preference to key workers, local residents, or individuals with lower incomes when allocating First Homes discounts.
Members of the armed forces and their families are granted certain exemptions. If you’re a service member, a separated or divorced spouse or civil partner of a service member, a surviving spouse of a service member who died due to their service, or a veteran who left service within the past five years, you’re exempt from the local authority conditions regarding key workers or local residencyThe borrower's residency status, such as whether they are a .... However, you’ll still need to satisfy the other eligibility criteria.
The First Homes Scheme operates by providing first-time buyers with a 30% to 50% discount off the market value of new homes. An independent surveyor assesses these homes to ensure the discount reflects the true market value. After applying the discount, the cost of these homes should not exceed £420,000 in London or £250,000 in other parts of England. When you decide to sell, the buyer must also be eligible for a First Home, and you must pass on the same percentage discount you received based on the property’s market value at the time of sale.
How to Apply for a First Homes Scheme Mortgage?
Applying for a First Homes Scheme Mortgage involves a few key steps. First, you need to get a mortgage in principle, which is a statement from a lender saying they would, in principle, lend you a certain amount. Next, you need to pay a reservation fee to secure your property. It’s also crucial to prepare for the scheme by researching new-build prices, reviewing your budget, and checking credit score.
Next Steps
The First Homes Scheme is a valuable tool for first-time home buyers, offering significant savings and making homeownership more accessible. However, it’s important to understand the eligibility criteria and application process to make the most of this scheme. If you’re considering this mortgage scheme, it’s advisable to seek professional advice to ensure you’re making the best decision for your financial situation.
How We Work
1: We contact you and take down your details, income outgoings, name, address etc.
2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.
3: You upload the documents and information needed via our channel our online portal.
FAQs
What is the First Homes Scheme?
The First Homes Scheme is a government-backed scheme that allows first-time buyers to purchase a new-build property with a discount of up to 30% off the market price. The discount is applied to the purchase price, so you don’t have to pay it back later.
Who is eligible for the First Homes Scheme?
To be eligible for the First Homes Scheme, you must meet the following criteria:
- You must be a first-time buyer.
- You must buy the property in your local area.
- Your household income must be no more than £80,000 in England or £90,000 in London.
- You must have a mortgage covering at least 50% of the price of the First Home (after the discount is applied).
How do I get a First Homes Scheme mortgage?
To get a First Homes Scheme mortgage, you will need to speak to a mortgage lender that participates in the scheme.
What are the benefits of a First Homes Scheme mortgage?
The main benefit of a First Homes Scheme mortgage is that you can get a discount on the purchase price of a new-build property. This can save you a significant amount of money, especially in areas where property prices are high.
Another benefit of a First Homes Scheme mortgage is that you can only sell the property to another first-time buyer. This means that you can’t sell the property to an investor or landlord, which can help to keep property prices affordable in your local area.
What are the drawbacks of a First Homes Scheme mortgage?
There are a few drawbacks to a First Homes Scheme mortgage. One is that you will need to have a mortgage covering at least 50% of the price of the First Home (after the discount is applied). This means that you will need to have a larger deposit than you would if you were buying a property without a discount.
Another drawback is that you can only sell the property to another first-time buyer. This means that you may have to wait longer to sell the property if there are no other first-time buyers in the market.
Overall, the First Homes Scheme can be a great way for first-time buyers to get on the property ladder. However, it is important to weigh the benefits and drawbacks before you decide if it is the right option for you.
