What is NewBuy?
Are you thinking of buying a new home, but struggling to save a large enough deposit required to secure a mortgage? If you’re a UK citizen then you may qualify for a mortgage under the government-backed NewBuy scheme.
NewBuy is a new initiative which aims to help home-buyers who may have found themselves unable to move up or step onto the housing ladder, secure up to a 95% Loan to Value mortgage on new build properties from participating builders in England.
Which properties are eligible for NewBuy?
To qualify for NewBuy, properties have to be:
New build – residential properties being sold for the first time or for the first time in the current form;
Priced up to £500k – but there is no cap on income;
Full ownership – NewBuy is not available for shared ownership or shared equity purchase;
Primary homes – not available for the purchase of second homes, for investors of for buy-to-let purchases;
This scheme only applies to capital repayment mortgages, not interest-only mortgages;
You must not be receiving help with your deposit from a local authority or other public body;
This scheme applies to England only; separate schemes are under consideration in Scotland and Wales.
Do I qualify for NewBuy?
Buyers have to be:
UK citizens and those with a right to remain indefinitely in the country.
New home buyers wishing to take advantage of the scheme will need to qualify for a mortgage with a mortgage lender in the usual way and be subject to the lender’s normal assessment criteria.
Where can I find NewBuy property?
What is an indemnity and what does it mean for you?
The scheme will be operated by the home building industry and mortgage lenders – the banks and building societies – working in partnership with the Government. The scheme is designed to protect the lenders against losses in the unfortunate event of a repossession, which is why they are prepared to make 90-95% mortgages available. It is important to note that this does not change a borrower’s responsibility to repay the mortgage in any way.
For more information and to find out if you're eligible for a NewBuy property look out for red NewBuy stickers on Rightmove and speak to the developer marketing the property for details.
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