In January I wrote a post about the year ahead and things I wanted from it. In that post, I mentioned I had started a Help to Buy ISA and I wanted to write more about what that means for those who may not know.
Essentially, the most important thing when it comes to buying out own home is money. We could save a tiny bit each month ourselves, buy a run down terrace house and spend the net ten years rebuilding it. But I would probably hate the work involved and it would cost loads. I know what state our previous rental was in, and the current one isn’t much better! I really want to own our own home but saving enough for a deposit is going to take a while.
Why I want to move
I love the house we’re in. Its a big, old, victorian building that has character and loads of room. However it doesn’t have a garden, or a driveway. It’s on a main road, opposite a business which employees annoying men who stare at us whenever we leave the house. It’s cold and full of condensation and T has to bleach the walls every month to keep the mould at bay. We have no hold over it as it’s rented, and that comes with a wealth of problems too. Our gas fire wasn’t working, so they took it out and replaced it with a freestanding electric fire – not hiding the hides grey metal panel that covers the hole where the gas one was. We aren’t allowed to put shelves up. We have to be careful about hanging pictures. And we cannot replace the hideous brown carpets.
Our long term goals
We thought about moving to another rental. But then we thought about how much money that would take from our wages which could be saved for a house of our own. Our rent is cheap.. though that doesn’t change the fact I’ve spent over £25k on rent since moving in. We thought about the long term and we can save more for a better home if we stay here, using the Help To Buy programme to help us save quicker. So long term makes sense to do that!
Help To Buy
Help To Buy is a government programme that kinda does what it says on the tin. It helps people buy a home. Usually aimed at first time buyers there are a few things that you can do through the government which fall under the Help To Buy bracket. The overall scheme was launched in 2013 and covers loans, mortgage guarantees, shared owership and more. The main things that myself and T will be using, I believe, in our quest to own our own home are the Help To Buy ISA scheme and the Help To Buy Equity Loan.
Help To Buy ISA
Like most other ISAs, this is just an account you have access to, which you pay a set amount into per month. This one is open to anyone who is expecting to be a first time buyer, and its a single person’s account, so if you are a couple you have your own. Once you pay £1600 into this account, the Government will pay out a bonus of 25% when you close the account. Your solicitor applies for the bonus for you and the bonus ranges from £400 (with a £1600 ISA sum) to £3000 (If you save £12000).
First Time buyers
Me and T are both first time buyers. So we have both got these ISAs, in the hope that we can both save enough for a bonus. Once Spike gets her 30 free hours childcare in nursery we will be around £100 better off each, each month. My plan for that money is to pay it into my ISA. If we can both save the maximum £200 per month, it’ll take us two years to save for a £9.5K deposit. Once you add the Governments 25% onto that its plenty enough to get a decent new build in our area.
Location, location location
Of course, we are lucky. Our area isn’t expensive, though its becoming more expensive since Sarah Beeny raved about it being the best place to live! So a new build on an east around here costs around £150-200k. With the Help To Buy Equity Loan too, where you get a mortgage for 80%, using a 5% deposit and get the rest from the Government, we could get a new build easily!
Starting on the right foot-ish
I am only putting £10 a month into my ISA at the moment. As I say, when the 30 free hours kick in for Spike, I will put more in. Oh well, maybe it might take 3 years of saving to get us set up – all I know is that we’ll be home owners before Spike is in juniors, otherwise I may just give up!
Obviously, I am not a money expert, or a mortgage expert. I am just writing about what I’ve learnt so far on my quest to own my own home. I’ve read up lots of different things on lots of different websites but I definitely recommend MSE for learning everything about Help To Buy ISAs!