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Shared Ownership is a term given to housing schemes that are operated by Housing Associations. The schemes are designed to provide first-time buyers, who are finding it difficult to afford a property on the open market, with a leg up on to the property ladder.
Here we take a closer look at Shared Ownership and how it works, together with Shared Ownership Mortgages and how we can help with one!
Table of Contents:
So, what is Shared Ownership exactly? Well, Shared Ownership refers to a type of scheme that is mostly operated by Housing Associations. These schemes are designed to assist first-time home buyers having difficulty finding an affordable home, with a leg up on the property ladder.
Shared Ownership is basically a part buy and part rent method of achieving eventual homeownership. The majority of Shared Ownership schemes are operated by Housing Associations, and tend to offer an initial 25% or 50% share in the property to the borrower. The remainder continues to be owned by the Housing Association, and the borrower then pays rent on this proportion.
The borrower can purchase further shares, usually in 25% blocks, as time progresses from the Housing Association, until the borrower eventually owns the full 100% of the property. This is known as "stair casing", and the funds received from the sale of the increased borrower shareholdings are reinvested by the Housing Association into further shared ownership developments.
Shared Ownership Mortgages are not widely available in the market place. Why? Well many lenders will not enter into transactions where the borrowers will not own the full value of the property that acts as security.
However, it is true to say that many lenders are now flexible in their approach to shared ownership mortgages, and will lend up to 95% of the borrower's share of the property. Some will even consider the full 100% of the share.
The proportion that is rented from the Housing Association is subject to a monthly rental payment, and this of course must be taken into account in any affordability calculations.
Not necessarily, although we should point out that Shared Ownership mortgages are quite specialist, and therefore your options may be increasingly restricted.
We have an extensive range of mortgage lenders and plans within our panels of lenders that are designed to help in most circumstances.
A quick call to one of our mortgage specialists will put you in the picture, and we'll be able to outline the available options to you, and provide you with a rapid in-principle decision.
Since you started to part-buy and part-rent your home, the value of your share is likely to have increased. You are now looking to own 100% of the property value, and many lenders will consider providing you with a mortgage of up to 100% of your home's market value. By doing so, the increase in the value can be released back to you.
Let's look at an example:
Say you purchased a 50% share in your home 5-years ago for £40,000. Your property is now worth £180,000, and to purchase the remaining 50% share, you will have to pay the Housing Association £90,000. This means that your profit, since purchase, that you could now release, would be £50,000 (£180,000 value less £90,000 to the Housing Association to purchase the remaining share, less a further £40,000 representing the approximate mortgage balance you still owe).
Why not Contact Us?
We'd be delighted to hear from you and help in any way we can, and if we are unable to assist then maybe we can at least try and point you in the right direction!
Our professionally qualified mortgage advisors are available to discuss the options open to you every day until 10.00pm, including the weekends on Freephone 08000 282 281. Or if you prefer, why not enquire online at any time.
Naturally, we'll carefully assess your circumstances, needs, requirements and aspirations and come up with the most appropriate solution for you. We're very confident that you'll find our service to be friendly, professional, helpful and free of that air of stuffiness that you might bump into elsewhere.
So, don't hesitate to get in touch if you think we could help and would like to discuss your requirements, of course without any obligation! We look forward to hearing from you, and we'll be happy to provide you with an in-principle decision - whatever your requirements, whatever your circumstances.
Hopefully that is Shared Ownership and Shared Ownership Mortgages explained for you. Don't forget there are hundreds of pages of mortgage related information throughout our website, so why not put a little time aside, and explore the possibilities, and remember we're just a free telephone call or a couple of mouse clicks away, and would be only too happy to hear from you and assure you of a warm welcome!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Claim £100 worth of Argos Vouchers upon completion of your transaction throughout 2008. Terms and conditions apply - see our Vouchers Special Offer page for full details.
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