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Help to Buy
You may be eligible for up to 15% funding towards your home from the Help to Buy (Scotland) Small Developers Scheme for the term of your mortgage.
The Help to Buy (Scotland) Smaller Developers scheme was launched on 21 January 2016.
The scheme will be open to buyers from 1 March 2016 onwards. No application forms can be submitted until that date and application forms will be made available from the appropriate administering agent.
What is the Help to Buy (Scotland) Affordable New Build Scheme?
The Help to Buy (Scotland) Smaller Developers New Build Scheme is available to help buyers who would not otherwise be able to buy an affordable new build home from a participating home builder.
Here's a short summary of how the scheme works:
The scheme is only available on new build homes from participating home builders and on homes up to a maximum value of £230,000 for purchases which complete on or before 31 March 2017, £200,000 for purchases on or before 31 March 2018, and £175,000 for purchases on or before 31 March 2019 (see important information below on the threshold prices)
Your mortgage lender is likely to require you to contribute a deposit of around 5%, your mortgage and deposit must cover a combined minimum 85% of the total purchase price.
Your mortgage from one of the participating lenders must be a repayment mortgage, of at least 25%, and cannot be an interest-only first mortgage;
The Scottish Government will help buyers to purchase the property by taking an equity stake of up to a maximum 15% of the value of the property;
No annual interest is charge on your equity stake;
The Scottish Government’s equity stake can be repaid at any time and is based on the value of the property at the time of the repayment;
The scheme is only available to those who are unable to afford to purchase the property without the Government purchasing an equity share in the property, i.e. if you are able to afford over 100% of the purchase price through a combination of available mortgage and deposit your application will not be eligible;
The scheme is not available to a single person who requires a mortgage of more than 4.5 times their income or couples that require a mortgage of more than 3.5 times their joint income; and
There are currently eight participating lenders offering mortgages for the Help to Buy (Scotland) Affordable New Build schemes, please contact them to check what their lending criteria is.
If you are interested in the scheme, what should you do?
Firstly, you should read the information leaflet for buyers which will provide you with important information on how the scheme operates.
Speak to an Independent Financial Advisor or a participating lender before you submit an application form to one of the agents administering the scheme on behalf of the Scottish Government;
You cannot submit an application form more than 9 months before the anticipated completion date;
You should not submit a full mortgage application until you have received an 'Authority to Proceed’ from one of the administering agents informing you that your application is eligible to participate in the scheme;
The scheme is a demand-led scheme and once its budget is fully allocated no further applications can be considered;
Please apply at least 3 months in advance of the completion date to allow the necessary legal paperwork to be completed.