LIFT Scheme Mortgages: The Ultimate Guide for First-Time Buyers in Scotland

An overview of the LIFT scheme mortgages

If you’re a first-time buyer in the UK, you’ll know how difficult it is to get on the property ladder. The average minimum salary required by the average first-time buyer in the UK has risen by 18% in the past three years alone and currently stands at £53,000 in 20 of the country’s largest cities.

But for first-time buyers in Scotland, there is a helping handA type of mortgage that provides assistance to borrowers who... available in the form of the LIFT scheme mortgages. This scheme offers shared equityThe difference between the value of the property and the amo... mortgages to first-time buyers, meaning that the government will pay a portion of the purchase price of your home. This can make it much more affordable to buy a home, even if you don’t have a large deposit saved up.

In this article, we will take a look at everything you need to know about the LIFT scheme mortgages, including eligibility requirements, the application process, and benefits. We will also provide some tips for first-time buyers who are considering applying for a LIFT scheme mortgage.

So if you’re looking to buy your first home in Scotland, the LIFT scheme mortgages could be the perfect solution for you. Read on to find out more.

Post Contents

What is the LIFT Scheme?

What is an eligibility requirement for lift scheme mortgages?

How does the New Supply Shared Equity (NSSE) scheme work and who is eligible to apply?

How do I apply for the NSSE scheme?

How does the Open Market Shared Equity (OMSE) scheme work and who is eligible to apply?

What are the latest updates on lift scheme mortgages?

How do I apply for the OMSE scheme?

How much can I borrow under a LIFT mortgage scheme?

Next Steps

FAQs

What is an eligibility requirement for lift scheme mortgages?

To be eligible for a LIFT scheme mortgage, you must meet the following criteria:

• You must be a UK citizen aged 18 or over.
• You must be buying a property in Scotland.
• You must be a first-time buyer.
• You must have a household income of at least £30,000.
• You must have a deposit of at least 5% of the purchase price of the property.

If you meet all of these criteria, you can apply for a LIFT scheme mortgage through a mortgage broker. The mortgage broker will assess your eligibility and help you to find a suitable mortgage.

How does the New Supply Shared Equity (NSSE) scheme work and who is eligible to apply?

The scheme is designed to help households on low to moderate incomes who want to own their own home, but who are unable to pay the full price for a house offered for sale by a housing association or local council.

Although it is a shared equity scheme, the buyer owns the whole of the property – but typically pays only 60% to 80% of the purchase price, whilst the Scottish Government pays the remainder.

The Government’s equity stake in the home is backed by its security over that proportion of the purchase it has funded. What that means is that if the owner decides to sell the property, the Scottish Government is paid back that same proportion of its value at the time it is sold. So, if the Government funded, say, 50% of the purchase, it receives 50% of the sale value of the property when it is sold.

The scheme is designed primarily for first-time buyers, with priority given to:

• those renting social housing – homes currently owned by a housing association or council;
• people over the age of 60;
• the registered disabled;
• members of the armed forces and veterans who have left military service within the past two years; and
• widows, widowers and other partners of armed forces personnelBorrowers who are employed in the armed forces. whose partner was killed in service within the past two years.

NSSE is primarily intended for first-time buyers, but it may also be made available to those who have owned their own home in the past but whose circumstances have changed significantly – through a marriage breakdown, for example.

If you are interested in any type of mortgage, you can contact a dedicated specialist broker.

How do I apply for the NSSE scheme?

Your first step is to check in which areas of Scotland any NSSE schemes are available – listings are updated on the Scottish Government website.

Contact the appropriate local council or social landlord directly, and they will provide further details, including the relevant application forms.

Together with any particular application details, you will also need to provide a statement of:

• your current income;
• the size of mortgage you are able to afford;
• how much you are able to contribute personally to the purchase; and
• information about your household and where you currently live.

How does the Open Market Shared Equity (OMSE) scheme work and who is eligible to apply?

The OMSE scheme is also a shared equity scheme but in this case available to those on low to moderate incomes who want to buy their home on the open market.

Under the scheme, you take on the lion’s share of the purchase – between 60% and 90% of the home’s cost – whilst the Scottish Government retains the remaining equity under an agreement entered into with you by way of a standard security or mortgage charge.

Different maximum price thresholds (or price ceilings) exist in various parts of Scotland, so it is important to check what these are in any particular area you might want to buy.

When you buy your home through the OMSE scheme you become its outright owner and assume the full range of responsibilities of other home owners:

• making the mortgage repayments
• arranging home building and contents insuranceInsurance that covers damage to the contents of a property.;
• paying for repairs and maintenance;
• paying your council tax;
• paying your water, lighting and heating bills; and
• buying the fittings and furniture for your new home.

What are the latest updates on lift scheme mortgages?

The LIFT scheme mortgages are a government scheme that helps first-time buyers in Scotland to buy a home. The scheme offers shared equity mortgages, which means that the government will pay a portion of the purchase price of your home. This can make it much more affordable to buy a home, even if you don’t have a large deposit saved up.

The LIFT scheme mortgages have been updated recently, with some great new benefits for first-time buyers. The price thresholds for the scheme have been increased, meaning that buyers can now offer over the property valuation from their own funds as long as the price paid is within the threshold for the property size and area. This means that buyers can now buy a home for a lower price than they would have been able to before.

The LIFT scheme mortgages are also now available to a wider range of buyers, including those who are self-employed or who have a low income. This means that more people can now benefit from the scheme and get on the property ladder.

Finally, the LIFT scheme mortgages are now available to buyers who are purchasing a home in a rural area. This means that buyers who want to live in a rural area can now benefit from the scheme and get on the property ladder.

These updates make the LIFT scheme mortgages an even more attractive option for first-time buyers in Scotland. If you are considering buying a home in Scotland, the LIFT scheme mortgages could be the perfect solution.

How do I apply for the OMSE scheme?

If you are interested in accessing the scheme, contact the Scottish Government’s agents and make an initial application.

If this is successful, you then receive a “passport letter” advising you of the maximum price you may pay and the maximum size of the home you may buy. The letter also advises you of the next steps to take towards completing the purchase.

How much can I borrow under a LIFT mortgage scheme?

As with any mortgage, different lenders are likely to apply different criteria when calculating the maximum amount you may borrow.

As a very broad rule of thumb, the maximum is likely to represent between four and four and a half times your income – with some lenders stretching as far as five times.

But the detail lies very much in the calculation of your actual income and expenditure – about which you may be expected to answer a raft of questions.

The online mortgage affordability calculatorWhat is an Affordability Calculator? An affordability calcul... published by the official Money Advice Service may help to give you a closer idea of the size of mortgage you might be offered.

Next Steps

It is not easy being a first-time buyer on a low to moderate income anywhere in the UK.

In Scotland, at least, there are a number of initiatives to help you gain that first footing on the property ladder and, here at Needing Advice, we may help you find the most suitable mortgage when applying to the LIFT Scheme.

FAQs

What is the LIFT scheme mortgage?

It is a government scheme that offers shared equity mortgages to first-time buyers in Scotland. The scheme helps buyers to purchase a home by providing a share of the purchase price, which can make it more affordable to buy a home.

Who is eligible for this scheme?

To be eligible for this scheme, you must meet the following criteria:

• You must be a UK citizen aged 18 or over.
• You must be buying a property in Scotland.
• You must be a first-time buyer.
• You must have a household income of at least £30,000.
• You must have a deposit of at least 5% of the purchase price of the property.

How does this Scottish Lift Scheme work?

The LIFT scheme mortgage works by the government, providing a share of the purchase price of your home. This means that you will only need to borrow a smaller amount from a lender. The government’s share of the purchase price will be repaid over time, with interest.

If you are interested, you can contact a dedicated specialist broker for your application.

What are the benefits of a Scottish Lift Scheme?

There are a number of benefits to a Scottish Lift Scheme, including:

• You can buy a home even if you don’t have a large deposit saved up.
• You can get on the property ladder sooner.
• You can save money on interest payments.
• You can benefit from the government’s share of the purchase price.

How do I apply for a Scottish Lift Scheme?

You can apply for a Scottish Lift Scheme through a mortgage broker. The mortgage broker will assess your eligibility and help you to find a suitable mortgage.

What are the risks of a LIFT scheme mortgage?

There are a number of risks associated with a LIFT scheme mortgage, including:

• You will have to pay interest on the government’s share of the purchase price.
• If you sell your home, you will have to repay the government’s share of the purchase price.
• If you fall behind on your mortgage payments, you could lose your home.

Is a LIFT scheme mortgage right for me?

Whether a LIFT scheme mortgage is right for you will depend on your individual circumstances. If you are a first-time buyer who is struggling to save up for a deposit, a LIFT scheme mortgage could be a good option for you. However, it is important to understand the risks involved before you apply for a LIFT scheme mortgage.