What Is the Best Government Scheme for First Time Buyers?

[Micheal Jorden]

What is the better government property scheme?

With the mortgage indemnity scheme coming out in March 2012 first-time buyers have significantly more choice than ever for government assisted move programs than ever before. This article will show potential users of the schemes the huge benefits and negatives or the mortgage indemnity scheme and first buy so that purchasers know which scheme fits them best.

The existing scheme is first buy which really is a scheme that is ready to accept everyone aside from people who already have a mortgage and property investors. The main element points are:

• Only need a 5% deposit. Purchasers can choose to place a 5% deposit down on the amount minus the 20% loan or on the entire purchase amount. When they pay a 5% deposit on the entire purchase amount then they would get an improved interest rate.

• Only need a 75% mortgage. This makes properties cheaper for purchasers and means that they may buy a bigger property than they would purchase by way of a normal mortgage cmyogiyojana.in.

• Interest free for 5 years 20% equity loan. This acts as a deposit so that banks are ready to have a risk and lend as to the they class as a greater risk client. The loan must be repaid within 25 years.

• Only on new build property.

The newest government property scheme could be the mortgage indemnity scheme and again is ready to accept everyone aside from property investors and people who now have a mortgage. The main element points are:

• Only need a 5% deposit.

• 95% mortgage that is underwritten by the government.

• Only on new build

As you can see really the only major difference is that with first buy scheme you receive a 20% equity loan. You can find two ways you will look at that and allot depends on what the property market conditions do over the next 12 roughly month. Since the loan is an equity one and the worth will change with the price I could be inclined to take that option if you wish to eliminate more risk if you were to think the property market should go down. This would safe guard your investment more than a 95% mortgage as you just have 5% worth of equity in the property.

On another hand though if you were to think the property market goes to increase over the next few years then the mortgage indemnity scheme could be better as you own 100% from day one.