Budget boost for home buyers

Buying your first home or moving up the property ladder can sometimes feel like a dream that’s out of reach due to hefty deposits and ever increasing house prices.

But Help to Buy, a new initiative unveiled in the Budget, aims to help first time buyers get their foot on the ladder and those ‘trapped’ in their existing homes unable to take the next step.

This two-pronged initiative is made up of the ‘equity loan’ and ‘mortgage guarantee’ schemes.

Both require just a 5 per cent deposit and are available on homes costing a maximum of £600,000.

Here’s how you can step up and move up with Help to Buy.

Equity loan:

l Spot the new build property of your dreams

l Top up your 5 per cent deposit by applying for the 20 per cent equity loan (available from 1 April 2013 for three years)

l Apply for a 75 per cent mortgage

l Enjoy your interest-free loan for five years

l You can repay the loan at any time or when you sell

Mortgage guarantee:

l Find the new build or older home that’s right for you

l With your 5 per cent deposit apply for a Government-guaranteed mortgage (available from January 2014 for three years)

l The Government guarantee means more mortgage lenders will be keen to offer low-deposit mortgages

It is important to seek expert advice when looking for a mortgage. A good place to start would be at a site such as Checkaprofessional.com - a public reputation directory where you can find mortgage advisors with unbiased and honest customer feedback.