All the help you need. to buy a new home from Castle Homes

Transcription

1 All the help you need to buy a new home from Castle Homes

2 Help to Buy is a new scheme backed by the Homes and Communities Agency, who are working with selected developers to make it easier for you to buy a new home. Help to Buy from Castle Homes (London) Limited Berkeley is offering Help to Buy at selected developments. Please visit our website: for details of participating developments. Credit is provided by the Homes and Communities Agency (HCA).

3 Help to Buy, the new low deposit scheme that can help you to buy a Castle home We know it s not easy buying your first home or moving up to a new one. Large deposits can take a long time to save for, and sometimes it s difficult to secure sufficient mortgage finance.

4 Help to Buy How it works Typical example: Cost of your new Castle Home 5% deposit 20% equity loan 75% mortgage Total 300,000 15,000 60, , ,000 Help to Buy The basic facts 5% deposit required Available to first time buyers and current homeowners who meet the qualifying criteria There s no upper limit on your household income You can buy a new home at participating developments with a maximum price of 600,000 20% is covered by a Homes and Communities Agency equity loan which doesn t have to be repaid until you sell You obtain a mortgage for 75% of the price The scheme is exclusively for owner occupiers

5 YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CHECK THAT THESE MORTGAGES WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT FINANCIAL ADVICE. How Help to Buy Works Eligible applicants will be offered an equity loan of up to 20% of the purchase price by the HCA who will hold a second charge on the property. Applicants are required to find the balance of the purchase price by a deposit and a repayment (not interest only) mortgage. Applicants are required to obtain their mortgage from a qualified lending institution. The Equity loan is repayable upon sale based on the relevant percentage of the sale value. In any event it must be repaid by the 25th anniversary. There is no interest in the first five years. The interest rate in the sixth year is 1.75% per annum payable on the amount funded originally but reduced to reflect any partial repayment. The rate increase each year thereafter by RPI + 1% per annum and will never reduce. Interest is payable monthly. Help to Buy Repayment Example after 6 Years Cost of your Home 300,000 Value of Your Home after 6 Years* 402,029 Repayment Due to HCA Fee of 1.75% on HCA Equity Loan Total Repayment after 6 years *Assuming 5% increases per annum 80,406 1,050 81,456 For this example this is equal to an APR 5.2% typical. The total amount repaid is 81,456. You should remember this is an illustration. House price inflation, the Retail Price Index and the fees and costs an owner pays could all vary substantially over time. Your solicitor/conveyancer will be able to provide a further illustration of APR when they advise you on your purchase. Prospective buyers should always seek independent financial advice before proceeding. Annual Percentage Rates (APR) for Help to Buy owners Because you have to pay fees on your Help to Buy equity loan during your ownership, and you may have to pay more than the original contribution back to the Agency, the effect will be similar to a loan under which a buyer pays credit charges at a rate dependent on the growth in house prices combined with the percentage rates of fees payable. The previous illustrations demonstrated separately the effects of house price changes and fees on the costs a buyer would have to pay starting with a 300,000 market value home and a buyer s affordable mortgage and contribution of 80%. The combined effect of fees and repayments affects the APR which is the buyer s cost of credit. Using the previous illustrations, after six years of ownership, if the buyer decides to sell and house prices have grown for example by 5% every year, the buyer will have to repay 80,406 on their equity loan. The owner will have also paid 1,050 in fees on the Help to Buy equity loan. This means the total amount payable after six years on the Help to Buy original assistance of 60,000 is 81,456. For this example, this is equal to an APR 5.2% typical. The total amount repaid is 81,456. You should remember this is an illustration. House price inflation, the Retail Price Index and the fees and costs an owner pays could all vary substantially over time. Your solicitor/conveyancer will be able to provide a further illustration of APR when they advise you on your purchase. Prospective buyers should always seek independent financial advice before proceeding. Castle Homes London Limited, Iver Grove, Wood Lane, Iver Heath, Buckinghamshire SL0 0LB

6 Make your new home a Castle home, with Help to Buy A brand new home has many advantages, and when you buy from Berkeley, you are buying from Britain s leading developer of high quality, sustainable new homes. We have a wide range of highly sought after locations in cities, towns, coast and countryside, and our homes reach standards of design, build quality and specification that simply aren t found anywhere else, making your first home an excellent investment as well as affordable. All our properties are covered by a 10 year warranty and 1 year of aftercare. Exceptional customer service also sets us apart from our competitors. We are also committed to making the buying process as straightforward and as enjoyable as possible, and consistently high levels of customer satisfaction prove that we do. You can find full details on Help to Buy at