Schemes That Help to Buy in Birmingham

The Shared Ownership Scheme has been around since the 1980’s and has provided a helping hand to first time buyers and home movers alike, in their goals to get onto or further along the property ladder.

Often referred to as “part buy, part rent”, Shared Ownership in Birmingham allows for you to purchase a share in the property, typically 25-75%, though this can be less depending on the mortgage lender, with the remaining amount being paid as a rental charge.

This is a flexible and stable option for home buyers that can make homeowning more affordable, with the potential to “staircase” later; purchase additional shares in the property, up to full ownership.

Shared ownership is only available on specific purpose-built properties.

A very large amount of the population will find themselves renting a home before they purchase a home, as it is seen as a more affordable option at first. For a lot of those people, saving for a deposit to buy a home of their own can be difficult, as it’s hard to save when you have so much already outgone in your rental costs and additional bills.

In this situation, you could find yourself wishing you could purchase the home you already live in, that you are renting. The good news is you might be eligible to do so!

If you are a tenant from a local council or housing association, you may be able to partake in Right to Buy or Right to Acquire, respectively. To qualify you need to have been a public sector tenant for at least 3 years.

Qualifying applicants will also benefit from a discounted purchase price. The amount of discount entirely depends on the length of time you’ve been a public sector tenant. Thankfully too, there are many mortgage lenders who will see the discount as a sufficient deposit.

Whilst that is the case, in some cases it is wise to save for one anyway, as there are mortgage lenders who may still require one and it can be beneficial either way, helping you to gain access to better rates of interest.

For first time buyers who are interested in having help to buy in Birmingham by way of a Right to Buy in Birmingham, you should get in touch with your local authority (whoever is the owner of the property) and check to see if you are eligible for this scheme.

Yes, it is still possible for home buyers to put down a 5% deposit on a property and be accepted by a mortgage lender, providing they are creditworthy and meet the mortgage lenders’ criteria.

There have been periods of time where mortgage lenders were perhaps hesitant to offer such high loan to values, which led to the introduction of mortgage schemes that could encourage mortgage lenders to offer 95% mortgages, with a safety net in place.

In some niche cases, there is still a need for these schemes. Nowadays though, we find that most mortgage lenders are willing to accept applicants who have a 5% deposit, though generally it is more beneficial for both the mortgage lender and the applicant, if the deposit is slightly higher.

Additionally, if you have a poor credit history or lower income, you may be required to put down a higher deposit of perhaps 15-20%, before you will be accepted for a mortgage.

Of course, saving for a deposit in general, especially anything above 5%, can be a challenge for prospective home buyers, which is why schemes to encourage 95% mortgages were introduced to encourage the minimum.

Your mortgage advisor in Birmingham will be able to look at your financial situation, to find an appropriate mortgage lender that can help to buy in Birmingham, even with a smaller deposit. If a scheme would be beneficial for you, they will be transparent and let you know.

Those familiar with the Help to Buy Equity Loan, may remember that the scheme was only applicable to new build properties. With that scheme ending, most other schemes are not exclusive to just new build properties.

For applicants who are looking to buy a new build property in Birmingham though, there are still schemes that apply to these situations directly, including one designed to help local first time buyers in Birmingham.

That scheme allows first time buyers purchasing new builds to potentially take advantage of a discounted price, providing that they are eligible. Additionally, there is the added caveat that if you sell down the line, you must agree to discount your sale price also.

In doing so, it encourages a chain of affordable home buying for future generations. As mentioned with other schemes though, this still might not necessarily be applicable to everyone, as your trusted mortgage broker in Birmingham will look at your situation and recommend the most suitable deal.

It’s important to note before looking at anything else, that a mortgage lender nor a mortgage broker can legally discriminate against anyone with a disability when it comes to applying for a mortgage. They cannot refuse to help on the basis that you are disabled.

Of course, financial situations are factors and that is what they will be looking at when you apply for a mortgage. The good news is that there are some mortgage lenders who are willing to look at applicants who are on disability benefits, though the process may be a little more drawn out.

If you are dealing with a long-term disability, the likelihood of this is much higher. This is because you are more likely to be receiving a consistent benefit over a significant amount of time. Shorter term disabilities may struggle a little, as there could be uncertainty on whether these benefits are temporary.

The good news though, is that if you are disabled and applying for a mortgage in Birmingham, there are schemes out there that can help you, including a variation of the Shared Ownership Scheme, which can apply to purpose-built properties.

Of course, even with this there are eligibility requirements, though disabled applicants can rest assured knowing that there may still be a handful of different mortgage options out there, regardless of their personal circumstances.

Another thing you may have heard of is a Lifetime ISA, sometimes shortened to LISA. An ISA is an individual savings account and exists to help people save for long-term goals, such as to purchase their first home in Birmingham.

The big benefit to a Lifetime ISA, is that the government will provide a top-up to your contributions of 25%, up to a particular figure per year, with there also being a maximum on your contributions.

That means if you managed to contribute £2,000 in a year, the government would give you an additional £500 in that savings account! There are certain eligibility criteria, such as the age bracket being 18-39 for setting one up, as well as it only being able to be used for a home purchase or for retirement (though it can’t be withdrawn until you are a set age).

All in all, it can be a great way for people to contribute towards their home owning future over time.

Obtaining a mortgage can be challenging for some home buyers, particularly those with a low income. Mortgage lenders will typically assess an applicant’s ability to repay the loan based on their income and financial stability.

A low income may result in a limited borrowing capacity and the applicant may be seen as a higher risk for the mortgage lender. Low-income home buyers may face difficulties meeting the affordability criteria set by mortgage lenders.

Additionally, a lower income can impact the amount of deposit a buyer can save, making it harder to meet the mortgage lenders deposit requirements. That said, there are various government schemes available that aim to support low-income home buyers to access affordable housing options.

Some schemes out there are designed with the intention of targeting lower threshold earners, giving them the opportunity to purchase a property at a reduced, sometimes discounted cost, making it a more viable and much more cost-effective way to purchase a home.

These, like the rest of the schemes out there, have their own eligibility criteria and will not always be applicable, but speaking to a mortgage advisor in Birmingham can be useful when you are looking for help to buy in Birmingham.

Forces Help to Buy is a government scheme designed to help members of the armed forces in purchasing a home. This scheme provides an interest-free loan to eligible personnel, allowing them to borrow up to 50% of their salary, capped at a maximum of £25,000.

The loan can be used towards the deposit and other associated costs of buying a property. The scheme aims to address the unique challenges faced by military personnel, who often have limited access to traditional mortgage products due to their frequent relocations.

Forces Help to Buy provides an opportunity for servicemen and women to get on the property ladder and establish a stable home for themselves and their families.

By offering financial support and favourable loan terms, the scheme helps make homeownership more accessible and affordable for those serving in the armed forces.

Find out more information about the schemes available to you on the government OwnYourHome website.