First Homes Scheme: Government Help for First Time Buyer Mortgage

The First Homes Scheme stands as a ray of hope for first-time homebuyers. This government initiative is a progressive housing policy designed to make homeownership a reality for individuals and families who might otherwise find it financially daunting. Under this scheme, prospective homeowners can purchase newly built properties at a substantial discount, significantly reducing the market price. 

Currently, the cost of purchasing a home and the often hefty deposit requirements can pose a significant barrier for individuals or families with modest incomes. This is where government interventions, like the First Homes Scheme, bridge the gap by providing financial aid, reducing upfront costs, and making homeownership a dream and a tangible goal. Take a read of this article, and by the end, you’ll understand how to take advantage of this scheme as a first time buyer mortgage.

An Overview of the First Homes Scheme

The First Homes scheme, introduced by the government in July 2022, offers discounted homes to first-time buyers in England who might struggle to afford one otherwise. This initiative allows first-time buyers to acquire a new-build home in their local area with a substantial 30% discount off the market price.

In simple terms, if you’re a first time buyer mortgage, you might have the opportunity to purchase a home at a significantly reduced price, ranging from 30% to 50% less than its market value. The home can be:

• a new property constructed by a developer
• a residence purchased from someone else who initially acquired it under the scheme

How the First Home Schemes in Ireland Work?

The 2023 First Home Scheme in Ireland permits first-time buyers to borrow up to 30% of their property’s value directly through the government-backed program. For the initial 5 years, there is no interest. Then until the next 15 years, the interest rate will be 1.75%, increasing to 2.15% up to 29 years and 2.85% thereafter.

In exchange, the Irish Government maintains a stake in your home. When you sell the property, the government will receive a portion of the sale price based on the share they initially took.

Note: In the context of this scheme, a first time buyer mortgage is defined as someone who has yet to purchase a property in Ireland or elsewhere. Additionally, under the government’s ‘fresh start’ policy, the scheme is open to individuals who have experienced bankruptcy or divorce and no longer possess a share of a property.

Let’s Make It More Clear for You:

Suppose you earn €50,000 annually, which is close to the average full-time wage in Ireland for a single person. You aim to buy a home valued at €250,000, and you already have the minimum deposit of €25,000 (10%). According to the Central Bank’s mortgage lending rules, you can borrow up to four times your income, totalling €200,000 in this case. This leaves you €25,000 short.

Through the First Home scheme, the Government provides you with €25,000 (10% of the property price in this example) in exchange for a stake in your home. You can repay or ‘buy out’ the Government’s stake in your home at any time, but there is no obligation to do so.

What Makes You Eligible for First Homes Schemes?

For in-depth clarity on your eligibility criteria, consult a trusted mortgage broker. However, the following list also provides brief info on your qualification for the FHS:

• Age Requirement: You must be at least 18 years old.
• First Time Buyer Status: The scheme is accessible to individuals buying a home for the first time.
• Eligibility for Divorced Individuals: Divorced individuals, even if they have owned a home before, can participate in the scheme.
• Eligibility for Bankrupt Individuals: Those declared bankrupt, regardless of previous home ownership, can apply for the scheme.
• No Ongoing Interest in Previous Homes: Divorcees and bankrupt individuals should no longer have any interest or ownership share in their former residences.

How to Apply for the First Home Scheme?

To apply for the FHS, follow these steps:

Eligibility Check

• Visit www.firsthomescheme.ie.
• Click on ‘Eligibility Calculator’ and provide your details, following the simple steps.
• Click ‘Check Eligibility’ to see if you qualify.

Application Process

• If eligible, click ‘Apply Now’ and answer a few easy mortgage-related questions.
• Create your application; submit supporting documents, including Approval in Principle (AIP) from a Participating Lender.
• Photo ID for all homebuyers
• Current address verification for all homebuyers

Eligibility Certificate

• Upon approval, you’ll receive an ‘Eligibility Certificate.’

Final Submission

• Once you obtain the “Eligibility Certificate” and “Mortgage Letter of Offer,” submit your FHS application for approval.
• After approval, your solicitor will return the signed “Customer Contract,” declarations, and forms to FHS to complete the process.

Benefits of First Home Scheme in Ireland

Financial Assistance: The scheme provides financial support, allowing buyers to borrow a percentage of the property value directly from the government, with low or zero interest rates for specific periods.

Reduced Deposit Requirement: First time buyer mortgage can receive a portion of their property value as a deposit, reducing the upfront payment required to secure a home.

Flexible Repayment Options: The scheme often provides flexible repayment plans, allowing buyers to repay the borrowed amount over an extended period, easing the financial burden.

Encouragement for Homeownership: By easing financial constraints, the First Home Scheme encourages more people to consider homeownership, fostering stable communities and individual financial security.

Support for Divorced and Bankrupt Individuals: The scheme is inclusive, extending its benefits to those who have experienced financial challenges, such as divorce or bankruptcy, and offering them a fresh start in homeownership.

Conclusion

For eligible first time buyer mortgage, the First Homes Scheme opens the door to unprecedented opportunities in homeownership. It’s a chance to step into a realm where dreams meet reality, where a home of one’s own ceases to be just a vision but becomes an achievable goal. 

To all readers intrigued by the prospect of participating in the FHS, the time to act is now. Don’t let this opportunity slip away. Take charge of your homeownership journey by seeking further information or assistance. 

Reach out to your local mortgage broker, well-versed in the scheme, to explore available properties and navigate through the intricacies of eligibility. Your dream home is within reach, but it starts with your initiative. Don’t hesitate to make the call, send an email, or visit the official website.