The FirstBuy scheme is the UK government’s latest effort to help low- to medium-income families who wish to buy their first home, but are unable (or find it difficult) to do so because they do not have the savings to pay the 25 per cent down payment most lenders require. For instance, a typical lender will gladly lend you (if you have a reasonably good credit rating) 75 per cent of your home’s value. However, most lenders require you to come up with 25 per cent by yourself, 5 per cent as a deposit, and 20 per cent as a down payment. Some lenders will not even let you pay for this with another loan for fear two loans will prove too much of a financial burden for your monthly budget. The FirstBuy scheme sidesteps these problems by providing a home equity loan of 20 percent of your home’s value (5 per cent you still have to find yourself). The beauty of this program is that it is paid as a partnership between the government and housebuilders and it does not have to be paid until you sell your home.

The fact the financial burden is shared by both the government and homebuilders is good news for taxpayers, and many builders are happy to pay their share if it allows them to unload empty new homes which have already been built. The second benefit of the loan—that it does not have to be repaid until you sell your home—solves the problem of increasing the financial burden on families who can’t afford a mortgage and a second home equity loan to pay for the down payment and deposit element of the home purchase.

If you live in the United Kingdom and would like to get your foot on the first rung of the property ladder, there is good news for you. The good news comes from a new scheme set up by the government and house builders for British homebuyers. One of the biggest problems British families who wish to buy a home face is the lack of savings to pay for a down payment. They might have the monthly income to pay for a mortgage but not enough savings to pay for 10 to 20 percent of the house’s price as down payment. This is not only in a nuisance for families wishing to own their own house, it also slows down the recovery of the real estate sector, which needs all the eligible buyers it can get its hands on.

Despite rumors that the program would be “killed” due to budget restrictions, the Mortgage Rescue Scheme is still alive and kicking thanks to 200 million pounds earmarked for its funding during the next two years. This popular although underused program is designed to help low-income and vulnerable families avoid repossession by either buying their homes and renting them back at a reduced price or by buying a percentage of the home and reducing the mortgage payments. However, March 2011 has seen some changes brought on the 2009 program specifications. If you are considering applying for a mortgage rescue program, these changes will affect you. However, if your application has already been processed by a registered provider, these changes will not apply to you.

Purchase Rate Changes

As we mentioned in our previous article on the Welsh Mortgage Rescue Scheme, this program is not for everybody. Although the Mortgage Rescue Scheme can provide valuable assistance to homeowners who are facing serious financial difficulties it may not be the best option open to you. For instance, if your financial situation is likely to improve in the short term or you have other assets you can use to pay for your mortgage, the mortgage rescue scheme may not provide the best assistance available to you.

How Can I Get Advice On My Mortgage?

Since the Support Mortgage Interest, SMI, program commenced there have been significant changes in its rules. This can be confusing for homeowners, especially those who have started receiving SMI financial aid recently. This article will summarize some of these changes and explain how your SMI is calculated. For those interested in knowing what the SMI is and who can apply, read the previous article in this series: Support for Mortgage Interest.

Changes to SMI

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