The Scottish First Homes Fund is Back. Could You Get Up to £10,000 Towards Your First Home?

Buying your first home will be one of the biggest financial challenges you may ever face. For many people, it is not the monthly mortgage payment that is the obstacle. It is saving enough for the deposit. The good news is that the Scottish Government has reintroduced the First Homes Fund, designed to help first time buyers get onto the property ladder sooner. If you are looking to buy your first home in Scotland, here is everything you need to know.

What is the First Homes Fund?

The First Homes Fund is a Scottish Government shared equity scheme that can provide up to £10,000 towards the purchase of your first home. Rather than being a loan, the Government contributes towards your purchase in return for an equity share in your property. There are no monthly repayments and no interest to pay on this contribution.

For example: If you buy a property for £200,000 and receive the full £10,000 contribution, you will receive a £10,000 Scottish Government equity contribution towards your purchase.

When you eventually sell the property, or choose to buy out the Scottish Government's equity share, they will receive the same percentage of the property's value at that time you repay them as the percentage borrowed on initial purchase (£10,000 on £200,000 is 5% therefore, the Government are due 5% of the future sale price or when you decide to buy that share back).

Who is eligible?

You may be eligible if you:

• Have never owned a property anywhere in the world

• Are buying a property in Scotland as your main and only home

• Are purchasing with a capital and repayment mortgage

• Have a mortgage covering at least 25% of the property's purchase price or valuation, whichever is lower

• Are buying a property valued at £300,000 or less

• Have total monthly mortgage payments and committed credit repayments that do not exceed 45% of your net monthly income

If you are buying with someone else:

• At least one applicant must be a first time buyer

• If the other applicant currently owns a property, they must sell it before your purchase completes

• Only one First Homes Fund award of up to £10,000 is available per property, not per applicant.

How much deposit do I need?

Although the First Homes Fund provides up to £10,000 towards your purchase, the mortgage lenders currently supporting the scheme generally require buyers to contribute a minimum 5% deposit from their own funds or through an acceptable gifted deposit.

It is also important to note that the £10,000 contribution cannot be used towards any amount you pay above the property's Home Report valuation. If you agree to pay more than the Home Report value, you will need to fund that difference yourself.

What can the fund be used for?

The scheme can be used to purchase:

• Existing homes

• New build properties

There are no restrictions on where in Scotland the property is located, provided it will be your only residence and within lenders criteria.

What cannot it be used for?

The First Homes Fund cannot be used if:

• You are buying a buy to let property

• You are purchasing with cash only

• You have previously owned a home anywhere in the world unless another applicant is a first time buyer

• You are using another Scottish Government shared equity scheme at the same time

• You are using a part exchange scheme, although builder incentives and assisted purchase may still be acceptable

How do you apply?

You must have an offer accepted on a property before applying for the scheme, but your application must be submitted before missives are concluded. Your mortgage adviser can submit the application on your behalf, making the process straightforward and ensuring everything is completed correctly.

Is the First Homes Fund right for everyone?

Not necessarily.

While receiving up to £10,000 can make buying your first home much more achievable, it is important to understand how shared equity works and whether it is the best option for your circumstances.

At Maben Mortgages, we will explain everything in plain English, assess whether you are eligible and compare all available mortgage options to ensure you make the right decision for both now and the future.

Thinking about buying your first home?

If you are wondering whether you qualify for the First Homes Fund, or you would simply like to understand your options, we would be delighted to help.

At Maben Mortgages, we provide expert, tailored mortgage advice and can guide you through the entire process, from checking your eligibility and arranging your mortgage to submitting your First Homes Fund application. Thomas Maben, Director & Mortgage Advisor,

Maben Mortgages. thomasmaben@mabenmortgages.com

07712337518