Own 60% of home with "ownhome" or 100% by myself?

jojo80_2

Good evening,
I'm just interested in receiving any opinions on which option you would advise for me in getting a mortgage.

I have applied for the ownhome scheme as I am a keyworker, and I have been accepted and told I could look for a property worth 106,000 maximum. My mortgage would have to be with the coop, and would be roughly 62,000. The rest is "lent" to me, after 5 years I pay a certain percentage of the borrowed amount as well as continuing to pay the mortgage.

The other option is ignoring the key worker initiatives and being able to get a mortgage from any lender. These seem more competitive, I've investigated this and I could look at properties at roughly 110,000 (including my deposit).

I'm not sure if it's best to take advantage of the ownhome offer, as my monthly repayments would be much lower. To be honest the monthly payments through the other high street lender (my second option) would be possible but v tight, I would almost definitely have to take in a lodger, which doesn't bother me in the short term, but i don't fancy having to do that indefinitely.

I'm only looking at flats for the time being, as where I live I could get a nice flat, but I would need to be able to raise around another 10K to start looking at small houses and that's out of reach. So do you think it's better to only own 60% but be able to comfortably afford it, or do you think it's better to go for owning 100%, even though it's likely to be rather tight for the next few years at least? I'm worried that if I go for the ownhome option I'll only ever own two thirds of the value of a small flat, so I'll never be able to "upgrade".

Sorry I've written reams, just wanted to explain my query clearly!
Many thanks
Jo

Chris2685

From my own experiences with this type of scheme, I would suggest taking the mortgage option wherever you can. The ownhome schemes are not as juicy as they first appear!

I am quite surprised that in this case they buy you less of a house than getting a full mortgage though! I would check to be sure how much a lender will actually lend you first, because often their online calculators are not too accurate, and when they actually speak to you they will come to a lower (or maybe even higher) figure than you thought.

Ellie279

I bought a key workers home on a shared ownership basis three years ago. I paid 65k for half of a new 2 bed house.
The area is lovely, and as i am only paying 140 a month rent, for the other half I overpay on my mortgage. I have cleared 15k from the mortgage.
The way I look at it is that you dont own the full house if you have mortgage on it. You may as well take advantage of the cheap rent and pay off more of your mortgage.
£140 would not even cover the interest on the other half so Im quids in! They have never been round to inspect, in fact I have never heard from the key workers people so you dont get bothered.