Shared Ownership Mortgage Brokers
The shared ownership scheme makes home ownership easier and more affordable for first-time buyers. Instead of saving a large deposit and getting a mortgage for the remaining amount of the property’s value, buyers can purchase a share of a property instead and pay rent on the remaining share.
In a similar way to the Help to Buy scheme, shared ownership may only require a small deposit, starting from as little as 5% of the price of the share. This is far more attainable than the 10% or even 20% of the full market value typically required. A shared ownership mortgage broker can help you determine the type of property you can afford, as well as guiding you through the mortgage process.
There is the option to increase your shares as time goes on if you want to, and you can buy up to 100% of the property in the majority of cases. This is referred to as ‘staircasing’ and it’s based on independent valuations at the time of purchasing additional shares.
When it comes to selling your home, you can sell it yourself if you own 100% of it or, if you own a share, the housing association has the right to buy it first. This is what is known as first refusal of the property. The housing association also has the right to find a buyer for the property.
Am I eligible for Shared Ownership?
In order to qualify for the shared ownership scheme, there are several requirements that you need to meet. You must be at least 18 years old and your household income needs to be less than £80,000 if you are outside of London, or less than £90,000 if you’re based in London.
While purchasers using the scheme are typically first-time buyers, you can use it if you already own another home, but you need to be in the process of selling it and you would be unable to afford a suitable home on the open market. You can use online calculators, like those on the Town & Country Mortgage Services website, to help you determine what you might be able to borrow.
Recent changes to the government ruling on shared ownership means that buyers can now purchase an initial share of the property from as low as 10%, and can also often defer their Stamp Duty Land Tax until their share of the property reaches 80%, which results in a huge saving up front.
It’s important that you have a good credit history, with no County Court Judgements (or bad debts) and that your mortgage or rent is not in arrears.
The application process for a shared ownership home involves first checking to see if you’re eligible and then seeing whether the scheme is available where you live. It’s worth speaking to a shared ownership mortgage advisor from Town & Country to help you with this and determine your affordability, as there are additional costs to think about besides your mortgage and rent payments, such as maintenance costs. They will also be able to help you assess whether you can get a mortgage, as not all lenders will provide a mortgage for shared ownership homes.
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