As your friendly neighbourhood maortgage adviser, I thought I would just try to explain in plain english, what the government have decided to do to help homebuyers.
1. The threshold for when you start to pay stamp duty will rise to £175,000 from tomorrow the 3/9/08, but only for 1 year- there is hope in the industry that this level may stay.
2. Mortgage Rescue- this is when local authorities will assess low income families who are struggling to pay their mortgages and offer them help in 1 of 3 ways: a) To convert the mortgage to a shared ownership, where a registered landlord buys a share that repays some of the mortgage and reduces the mortgage amount and issues a lease. b) Shared equity , where a registered landlord provides a loan allowing mortgage payments to be reduced or c) Sale & Rent back by a registered landlord repays the mortgage debt completely and sets an affordable rent.
3.Homebuy direct-this is for 1st time buyers. This is a 30% loan to buy a new build, funded by the government and the developer, free for 5 years for incomes under £60,000-NOTE, you would have to be prepared for repayments after the 5 years, so would need a future plan!
4. Affordable housing-More local authority housing as more money has been made available from the government for grants, hopefully 5500 new houses.
A cautionary note just to say that the lenders must accept these schemes and be prepared to provide the mortgages, as none of this has made more funds to them available so they will still be picking and choosing low risk mortgages.
