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Newbuy Government Scheme To Help First-Time Buyers

March 12th 2012
By: Melanie

Great news for first-time buyers as the government launches new mortgage indemnity scheme.

Under the scheme the construction industry and taxpayers will act as co-guarantors on new homes bought by existing for first-time buyers.

The government expects the NewBuy scheme to enable first-time buyers to borrow up to 95% of the value of their new homes. Under this new scheme the builder will pay 3.5% of the sale price into a holding account with the mortgage lender for seven years. Then taxpayers will pay additional guarantees of 5.5%, however these monies will only be called upon in the event of a major property crash. This is great news for first-time buyers and the construction industry.