If you’re struggling to borrow enough to buy your first home, Nationwide said it may be able to give you a Helping Hand. From April 26, they are launching the lender’s Helping Hand mortgage. Giving first-time buyers the option of borrowing up to 5.5 times their income when taking a 5 or 10 year fixed rate up to 90% Loan to value (LTV).
“Helping aspiring homeowners buy their first home was one of our founding principles. But we know it’s become harder than ever to realise that dream,” said Nationwide.
But what they neglect to mention until the end of the marketing material on their site is that you cannot apply for a Helping Hand if you, or anyone you’re applying with, is self-employed.
What if you have been freelancing for over a decade and can prove you are good for the money? What if the person you are buying with has a good salary? Does that mean you should just be left off the mortgage even though you know you could be contributing with mortgage payments even in a smaller way? Does this exclude PAYE contractors, too?
The average price of a first-time buyer property has increased 41% in the past 10 years with average income rising by just 18%. Affordability remains a key issue stopping many from owning a house, but excluding the self-employed squashes this country’s entrepreneurial spirit.
Nationwide said they have created a £1 billion fund to help those who can’t quite afford their first home. It means a first-time buyer couple with a joint income of £50,000 can now borrow up to £275,000 with Helping Hand. Rather than the £225,000 they could borrow previously. Assuming a 10% deposit and no other costs impacting affordability.
Applying for a helping hand? Not, if you are self-employed…
To apply for a Helping Hand you need to:
- be a first-time buyer. To Nationwide, this means you will not have had a mortgage in the last 3 years. If applying jointly, both applicants need to be first-time buyers
- have at least 10% deposit.
- take out a 5 or 10 year fixed rate product.
You cannot apply for a Helping Hand if you, or anyone you’re applying with, is:
- Self-employed
- Using an affordable homeownership scheme such as Help to Buy, shared ownership, Right to Buy or Forces Help to Buy.