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A lender has introduced Home Purchase Plan (HPP) products for First Time Buyers with a 5% deposit. It has been a great turnaround in the Islamic finance industry in the UK. The Covid-19 pandemic forced the Islamic finance providers to increase their minimum deposit requirement up to 20% loan to value. Today, it has come down to a 5% deposit allowing first-time buyers to apply for Islamic finance and get on the property ladder.find me a mortgage
The low deposit (5% of the property value) Home Purchase Plan (HPP) products are available to first-time buyers who are living in the UK. Further, they need to have permanent rights to reside in the UK. It means that if you are a British ex-pat living abroad, you would still require a higher deposit of 20%.
In addition, the lender has also launched HPP products up to 90% loan to value for UK resident purchasers, home movers, and customers refinancing their property.
More good news! The Islamic finance provider has reduced the lower-level cap on minimum finance amount from £150,000 to £100,000. It means the minimum finance amount to be raised with the provider would be £100,000 and the minimum purchase price would be £105,000.
Before the latest criteria update, the GateHouse bank had a minimum property value cap at £190,000. Applicants who wanted to buy a property below £190,000, could proceed with the transaction. Now, they can start working on the home buying process if the purchase price is above £105,000 and they have a 5% deposit.
The lender would require a valid UK Visa with at least 12 months unexpired at the point of application together with a valid Passport. Applicants must be residents in the UK for the last 6 months consecutively at the time of application. Applicants must have 12 months continuous employment history; of which the last 6 months must be in the UK at the time of application.
If you are a non-British national living in the UK without permanent rights to reside, the lender would require a minimum 25% deposit.
The lender would require,
- Twelve months validity on the passport.
- Home office letter confirming the UK Visa or Biometric Resident Permit Card or Visa Stamp on the passport are acceptable
- Applicants UK contract of employment
Key changes in the Islamic Finance criteria for home purchase plans
Applicants can speak to a specialist Islamic finance adviser to explore the options and check their eligibility to apply for a home purchase plan. We at WIS Mortgages, provide specialist Islamic finance advice for free!