Help to Buy Basics
Updated: Feb 10, 2019
If you’re buying a house for the first time, you’ll come across lots of new terminology, this is doubly true with Help to Buy and you may think that buying is more complicated...don't worry! This blog post should explain the Help to Buy buying and Conveyancing process in simple terms.
If you’re buying a property using the Help to Buy Equity Loan scheme in the East or West Midlands, Help to Buy Midlands will oversee the conveyancing process.
If you’ve not come across the terms before, conveyancing is the term for the administrative, financial and legal processes of buying and selling properties.
There are certain milestones where your Help to Buy Scheme provider will need to confirm to your solicitor that they can move on to the next stage. Most of the time, they will communicate with your solicitor so you won’t have to worry about these milestones, but if you would like to know more about the process, read on.
Applying for Help to Buy
The first thing you will need to do is reserve your home with the developer. Then you'll need to complete the application form for the Help to Buy Equity Loan, which is called a Property Information Form (PIF). Attach a copy of your reservation form to your online application.
You’ll need to find a solicitor to help with your conveyancing and we’d always recommend that you choose someone who is familiar with the equity loan scheme.
You can find a list of solicitors who regularly work on Help to Buy applications online or if you have a broker, they can recommend a solicitor that can work with the mortgage lender they find you.
Authority to Proceed
Once your Help to Buy Provider has received your PIF and Reservation forms, they will check to make sure you’re eligible for the scheme and that you can sustain the purchase financially.
The government doesn’t want anyone to over-extend themselves financially and then have difficulties later paying their mortgage or interest payments.
If approved for the scheme, your Provider will issue a document called an Authority to Proceed (ATP). This document confirms to you, the developer, and your solicitor that you meet the criteria for the equity loan scheme and the conveyancing process can begin.
The ATP is valid for 3 months but most people will move onto the next stage sooner than this.
Authority to Exchange
You will need to pass on your copy of the ATP to your financial advisor, so they can start to broker your mortgage for you.
Your lender will need to be signed up to the Equity Loan scheme – there are over 15 lenders who offer mortgages currently so your broker shouldn’t have difficulty finding one.
As part of getting a mortgage offer, your lender will want a current valuation of your property – you will probably have to pay for this valuation to be done, although some mortgage lenders offer a free valuation as part of their deal.
Meanwhile your solicitor will be completing various questionnaires and searches on your behalf. They will also gather together copies of your Mortgage Offer, valuation and a form called a CML (Council of Mortgage Lenders) form which lists any incentives the developer has offered you. Incentives might include such things as turfing your garden, white goods, paying your stamp duty or other discounts.
Once your solicitor has your Mortgage Offer, valuation and CML form and you are ready to exchange contracts, they will send copies of these documents to us with a request for authorisation to go ahead with exchanging contracts. Once the Provider has checked all the forms are accurate and consistent and then issue your solicitor with what’s called an Authority to Exchange (ATE).
Your solicitor will then exchange contracts between you and the developer. Once you’ve exchanged contracts, you have up to 6 months to complete the purchase. Some people will complete shortly after exchange but you may have to wait if your property isn’t ready yet.
When your property is ready, and you and the developer know the exact date when you want to complete your purchase, your solicitor will apply for authority to go ahead.
The Provider will again check to make sure that all the forms your solicitor has sent are accurate and complete and then will let the developer know that it’s ok to go ahead by issuing them with a form called a Confirmation to Developer (CTD).
This is the final milestone and once the developer has the CTD, they can go ahead and complete on your purchase. Some smaller developers will need to allow enough time between exchanging contracts and completing for the equity loan to be transferred from the government. Providers will recommend that developers allow 15 working days for the money to come through.
Complicated? Not really…
This may sound complicated but it really isn’t. Most of the paperwork will be done either by the Provider, your solicitor or your financial advisor. Most of the time we’ll be communicating directly with your broker, simplifying the process.
Once you’ve completed, you can move into your lovely new home!
Create finance has expert brokers who specialise in supporting clients with Help to Buy schemes across the country. Give us a call or arrange to speak to a broker for further advice today.