The Help to Buy Mortgage Guarantee Scheme was designed to help lenders offer home buyers more high loan-to-value mortgages
(80-95%), backed by government support.
The Welsh Government and house builders were to act as guarantors so buyers could secure high loan-to-value mortgages
not otherwise be available to them.
It will lead to high loan-to-value mortgages
of up to 95% using guarantees from both housebuilders and the Welsh Government.
High loan-to-value mortgages
require equally high credit scores/ratings which over recent years has resulted in many people being unable to get a mortgage or remortgage.
Lenders pushed out a spate of high loan-to-value mortgages
in the summer to cater for the backlogged first time buyer market, and, although they have taken time to feed through, we now are we beginning to see borrowers take them up in notable numbers.
The withdrawal next March of the stamp duty land tax holiday for firsttime buyers on purchases up to pounds 250,000, combined with the better availability of high loan-to-value mortgages
, could see a modest increase in first-time buyer purchases over the next three months, with a possible fall off later.
First-time buyers, often seen as the lifeblood of the market, have been hit especially hard as availability of high loan-to-value mortgages
has decreased in line with lenders' risk appetite and funding availability.
They added that this caution was being reinforced by the higher capital requirements needed for high loan-to-value mortgages
That's particularly true for home purchases, where low interest rates, tax deductions, and low-down payment products have made high loan-to-value mortgages
more appealing to consumers.
These are flexible, high loan-to-value mortgages
that also use the 1 percent or $500 down payment formula.
The demand for high loan-to-value mortgages
is on the rise.
Despite the difficult conditions, some lenders have started to bring new products to market, such as hybrid fixed/variable rate mortgages and high loan-to-value mortgages
at more competitive rates than were previously available.