A COUPLE were faced with a tough decision after realising they were fed up with renting – but now they’ve bagged a dream three-bed home and know they made the right choice.
Adam and Jodie Davies were due to get married in September, but they were renting and knew they wanted buy a home, so realised they needed to choose between a wedding or saving for a deposit.
Adam and Jodie Davies bagged their “perfect” home through a little-known schemeBELLWAY HOMES
The couple cancelled their £30k wedding to get on the property ladderBELLWAY HOMES
But when the couple discovered a little-known scheme that meant they would be able to buy a home now, they decided to ditch the wedding and use the £10,000 they had saved for it, plus their remaining £12,000 savings, to put down a deposit.
The scheme meant Adam, a 34-year-old finance manager, and 32-year-old Jodie, an operations manager, were able to bag a three-bed Bellway home in Ebbsfleet Garden City, Kent in June.
They lost a £3,000 deposit by cancelling the wedding, but feel it was still the right decision.
Adam said: “We were living in a rented two-bedroom apartment in Ebbsfleet Garden City, and had a conversation in the Christmas holidays in 2023 about buying our own house.
“We were fed up of paying rent when we could try to get a joint mortgage and have our very own place.
“We had £22,000 saved up, and eventually took the decision to cancel [our wedding]. We lost a non-returnable £3,000 deposit on the venue but figured it was best to just take the hit.
“After that, we put all our energy into finding a house and organising a much cheaper wedding this summer.”
Adam and Joe managed to get their home, which cost £444,950, through a deposit contribution scheme.
The couple put down a 5% deposit which Bellway Homes matched.
So, the couple were able to bag the nearly half-a-million pound property with just a £22,500 deposit.
The Ebbsfleet home is well-placed for Adam and Jodie as both have just a half-hour commute to work.
The property also comes with two off-road car parking spaces and a south-facing garden.
“This house is perfect for us and it is future proofed,” Adam said.
“We want to start a family soon, so having three bedrooms means we can have a baby and not have to move.
“We know we made the right decision.”
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Other similar schemes
Launched in June 2021, the Deposit Unlock scheme lets you buy a new-build home with just a 5% deposit, although you can pay up to 9.99%.
Mortgage lenders are usually stricter on the amount they are willing to lend people wanting to buy a new home, as in some cases they can lose value after being built.
That means lenders often set the minimum deposit for new build properties at 15% or even 25%.
However, the Deposit Unlock scheme was devised to get around this and let homeowners with a smaller deposit get on the property ladder.
The Home Builders Federation says the scheme has helped “hundreds” of homeowners get on the ladder, suggesting take-up is quite low.
Through the little-known scheme, building developers pay into an insurance policy for the buyer’s mortgage provider which reduces the bank’s risk and makes them more willing to offer a mortgage to someone with a lower deposit.
The maximum mortgage you can take out on the scheme is normally £833,250, although this depends on the lender.
Beware that not all housing developers are signed up to the scheme.
Here is a list of developers that are, according to the Home Builders Federation:
3West Group
A R Cartwright
AJ Property Group
Allison Homes
Anderson Design & Build
Anderson O&U
Ashberry Homes
Ashwood Homes
Baker Estates Limited
Barratt Homes
Barratt London
Beal Homes Limited
Bellway Homes
Bellway London
Bewley
Blackstone Developments Limited
Bloor Homes
Bovis Homes
Braidwater Limited
CALA Homes Limited
Campion Homes Limited
Chase New Homes
City & Country Homes
Countryside Properties
Crest Nicholson
Croudace Homes
David Wilson Homes
Davidson Group
Deanfield Homes
Denbury Homes
Devine Homes
Devonshire Homes
Durkan Estates
Edenstone Holdings
Edwards Homes
Fairgrove
Fairview
Fenwood Estates
Fortitudo Limited
Genesis Homes
Gleeson Build & Develop Limited
H&H Properties
Hagan Homes
Hayfield Homes
Hill
Hopkins Homes Limited
Ilke Homes
Kebbell Country Homes
Kebbell Development
Keepmoat Homes
Kitewood Estates Limited
Lagan Homes
Life Less Ordinary
Linden Homes
Macar Developments
Mandale Homes
MCI
Metis Homes
Miller Homes
MJ Gleeson PLC
Morris Homes
Morrish Homes
Nicholas King Homes
Norfolk Homes
Orbit Homes
Pat Munro Homes
Pearce Fine Homes
Pentland Homes Limited
Persimmon
Peter Ward Homes
Prospect Homes
Redrow
Sigma Homes
St Modwen Homes
Stonebond Group
Stonebridge Homes
Taylor Wimpey
Thakeham
Thomas Homes
Tilia Homes
Vistry Group
Waters Homes
Weston Homes PLC
Wheeldon Brothers
Woodstock Homes
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How to get a mortgage through Deposit Unlock
There are only a few providers that offer mortgages to people buying through the Deposit Unlock scheme – Nationwide, Accord, Perenna and Bluestone Mortgages.
You can find a mortgage broker online by using a directory like Unbiased.co.uk.
The MoneySavingExpert.com website also has a list of top mortgage brokers to choose from.
It’s worth noting that while the Deposit Unlock scheme allows you to buy a new build home, you aren’t eligible if you are planning to use the property as a buy-to-let.
Buy-to-let is where you buy a property to rent out rather than live in.
One major advantage to the Deposit Unlock scheme is that you usually pay less mortgage interest than you would signing up for a regular 95% loan-to-value home loan.
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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