Hopefully first time buyer looking at shared ownership

andyfrombrum

Hi there,

Myself and my partner are looking to become first time buyers.

I currently earn £19k pa plus bonuses, my partner, £13.5k pa. Both in full time jobs.

We have found a house that we are very interested in under a shared ownership scheme. According to the housing association the house is under, there is a very good chance the house would be made available to us, hence I am here hoping for advice.

My mind is full of questions I can hardly seem to organise at the moment. I guess the main question at the moment for me is where do I start?

I am planning on phoning the guys that tescos promote as mortgage (brokers I think) guys, but other than than I'm in a bit of a panic due to the sheer size of the trouble I could be getting myself in to.

Can anybody out there offer advice on this please? I'm really unsure wheer to look for mortgages, or even if we should wait now the goverments bail out of the banks has started and they are to try and restore lending to 2007 rates, though I may have the wrong end of the stick on this.

Thanks in advance,
Andy

mell242

Have you actually applied for the house through the HA?
When I bought a SO home our HA recommended several financial advisors to us and through one of those we got our mortgage. Some HA specify that you have to use their recommended advisors.
If you haven't yet applied I would make that your first move, you don't have to go through with anything at the moment I would just set the wheels in motion if you are really keen. It can take a while anyway for the whole process and it depends who else you are up against in terms of the criteria for allocation of the property ie. key workers, local connections etc.
Good luck though!

mic200202

My thoughts would be to get some face to face advice locally,with an independent broker.It will be much easier than over the phone.Shared ownership isnt straightforward and you need to understand the process and your future options properly. There may be better deals on the way, there may not be...prob is if you hang around house may be gone.

andyfrombrum

We haven't officially applied for the house through the HA yet, although we have made our interest known and had a viewing of the property.

The HA will need to double check our criteria before officially offering us the property, however we have had unofficial meetings with them and the general feeling is in this case it should be fine to go ahead.

Having now talked to a very nice bloke at a whole of market broker, I have now been informed that there are apparently no openly available 95% mortgages on offer in the market.

He also told me that Halifax and HSBC are offering 95% deals if arranged in store.

The good news for us is that he thinks we are eligible for borrowing up to £125k ... quite a bit over what we would need.

I know my partner is going to want to investigate these in store mortgage offers.

Myself, I am starting to think that its the right time to buy a house, just the wrong time to get a mortgage :-S

robin_banks

I'M HAVING A NIGHTMARE WITH MY SO PURCHASE !!!.

Looking to purchase 25% of property worth £275000 in West London, applied for the mortgage agreed and approved subject to valuation. The Lenders valuation was over £30,000 less.

The HA has suggested we borrow from another mortgage provider as they seem unable to comprehend that the property is simply not worth what they're asking.

If I was to go to another lender they would also without question value it at substantially less, becuase that is what it is worth. THe HA is being completely unreasonable and not budging one penny from the asking price despit the fact the survey was carried out nearly 3 months ago, as we all know a lot has happened in the last 3 months.

mell242

robin_banks wrote: »

Looking to purchase 25% of property worth £275000 in West London, applied for the mortgage agreed and approved subject to valuation. The Lenders valuation was over £30,000 less.

I have to say that I thought this would happen with SO properties. We have seen some SO properties in our area and the prices have not changed from when they were first advertising them 6 months ago. Totally unfair!

robin_banks

mell242 wrote: »

I have to say that I thought this would happen with SO properties. We have seen some SO properties in our area and the prices have not changed from when they were first advertising them 6 months ago. Totally unfair!

A poster on a much older thread mentioned why dont HA's appear to be willing to negotiate on price.

A simple fact is that the property is not worth what the HA deem it to be worth and the lenders valuation confirms this.

Yet they are rigidly sticking to thier belief that this property is not overpriced and will sell. In effect they are forcing people to try and take on more debt than the property is worth, so in one foul swoop savings are wiped out and the purchaser is in negative equity.

During a heated discussion with the HA a hypothetical was posed that if the purchase does not go through, we as the prospective purchaser could lose £1500 as a result of an unrealistic valuation being placed on it, the sales staff advised that this 'often happens when you invest in property', correct me if I'm wrong but Housing Associations should be 'not-for-profit' organisations?.

As such is it ethical for a prospective purchaser to left so much out of pocket by an organisation that has about 30 charity shops?.

We're high priority as we are in a 1 bed LA flat with an 18-monther with one on the way, believe it or not this is not classed as overcrowding and we have no chance of getting a 2 bed flat with the LA, shared ownership is the only way we''l ever get a 2 bed property in London.

We're lucky that I've been promoted at work and now earn a reasonable salary and can afford to get a SO mortgage (they have been getting increasingly difficult to afford). The council are keen for use to move as we will be giving up a property which they much need and we're keen to get out of the property as we need a larger one.

The HA seem unwilling to let common sense previal in this instance. I would be interested to see what would happen if a further valuation stated the value to be even lower.

Conrad

Can be difficult to obtain finance on these for a variety of reasons. Only a few lenders lend on SO and thier criteria is very strict.

Halifax
Abbey
Saffron
Ipswich

These are the main 4 as far as I recall

mell242

Looks like Nationwide are doing them still aswell.
http://www.nationwide.co.uk/search/DisplayArticle.aspx?article=1332

robin_banks

Conrad, agreed Safforn no longer provide SO mortgages, Kent Relaince stiil do, Brittania with a 50% equity purchase. Leeds, Ipswich, Abbey, Halifax (though I understand this is under review) .

All of the above require 10%, I wont have a problem getting a mortgage for this property, the issue concerns the HA's completely unrealistic valuation of the property.

robin_banks

Nationwide 75% LTV