The government increased the home loan guarantee scheme in the second phase and has revealed it to the public with something of a fanfare. At last, the home loan companies will be offering their products to Joe public.
Phase two has been planned in such a way so that small investors can easily buy a real estate property at lower prices than current rates. The purpose of these activities is to provide the help first time real buyers need to get on the property ladder as they are now able to buy a house with a down payment of only 5 percent of the actual price.
The global financial crisis is still alive and kicking and the result of this is that banks and other financial institutes are not interested in invest money in property. Various types of risks are involved with this types of ventures which banks are still reluctant to take.
This new scheme is available for next 3 years and it is applicable for both old and new properties. The fund itself is estimated to be around £600,000. The first phase of this scheme was launched in the month of April 2013 but didn’t have the expected success.
A question many are asking now is which companies have registered with the scheme with a view to providing loans. High street names Halifax and Royal Bank of Scotland have agreed to provide loans and they are now ready to accept new applications for mortgages. Halifax and Royal Bank of Scotland are two Government banking institutions.
HSBC, along with Santander, have also declared that they will provide loans for low-deposit mortgages and both are about reveal the details very soon. Virgin Money and Aldermore Bank are going to launch a new loan scheme for real estate sectors within a few months from now.