75% ownership

credit_crunch_victim

a develoment of that size would have taken a fair time to get planning and be built
if they budgeted for the properties to be sold at say 200k they are now probably only worth 170k so will be looking o shift them any way they can
there are over 1 million new build properties scattered around the country at the moment and all dropping in price
also if you say you can save extra money towards the other 25% why not just buy 100% of the property straight away and take away the risk of this scheme and you can get a better deal on th price

mailmannz

CCV,

I guess not a lot of people have around £50k for a deposit (to get the best mortgage rates, ie. 75% of the property price).

We are currently weighing up the pro's and cons of a 75/25 deal but our big problem is finding a mortgage lender that will provide a mortage for a shared equity property.

RBS has already said that dont do 75/25 as they consider this a 100% deal!

So, who have you guys used for your 75/25 mortgage?

Regards

Mailman

Potnoodle5878

We looked into this with David Wilson homes. They used a IFA called Mortgage Integrity in Southampton (im on the Isle of Wight).

I was told that only two lenders would consider this deal, and they were Halifax and Nationwide.

We decided not to go with it as although the show homes were gorgeous and the property was a dream home, I felt the price was inflated. I believe if we were cash buyers we could have picked it up for 20% less than its current price. Instead we'd be taking a major gamble that the economy and housing market would be making both a recovery and gain in 10 years.

We made the decision that it all seemed to far too easy, perfect home, could just about have afforded the mortgage, but not had any spare cash for any of lifes little luxuries such as food and clothes :rolleyes: .

Hope it helps.

hidchere

id come to the decisition that it was a bit too risky, we could borrow 176 total and we were looking at a 220 but under on the 25/75, for it to really work in your favour is for the property to be valued at the 176 or less in the first place, then you get all the fees paid 4 and also the better rates..plus assume that ur new place will be worth more after ten years... unless u always want to live there. then it doesnt matter. also halifax for us were the best rates....

brit1234

Wise choice. :T House prices are predicted to fall another 2% this month alone. Prices are falling fast, just keep saving that deposit, be patient and your home dreams will come true.

Lanz81

well we've done it and we are happy, reasons we have done it are:

Do not need deposit
Not a huge mortgage (£565 pm)
Buying a home not an investment
Got 15k off the asking price
Expecting 1st child in May
Fell in love with the area
Currently live in HA house in rough area

These are just my persoal reasons so please dont come back with any negatives comments from those who think i have made a mistake

Other useful info may be that I bought via Bellway homes who use New Homes Mortgage brokers and the mortgage is with Halifax at the fixed rate of 4.49%

Hope this helps someone

XXX

Bargain_Rzl

mailmannz wrote: »

We are currently weighing up the pro's and cons of a 75/25 deal but our big problem is finding a mortgage lender that will provide a mortage for a shared equity property.

RBS has already said that dont do 75/25 as they consider this a 100% deal!

It IS a 100% deal. If you buy a shared ownership property - be it shared equity or part buy/part rent - what your lender needs to know is what deposit you have for the portion YOU are hoping to own. If you buy 75% of a £200k property, you're looking to raise £150k, and if you haven't got any money at all towards that, you're asking for £150k from a mortgage company. £150k is 100% of £150k - the total value of the property is pretty immaterial. You'd need to look at having a £15k deposit to bring your required LTV down to 90%.

mailmannz

brit1234 wrote: »

Wise choice. :T House prices are predicted to fall another 2% this month alone. Prices are falling fast, just keep saving that deposit, be patient and your home dreams will come true.

So what happens in 6 months when you go to get a mortgage and no one will lend you more than, say, 75% of the value of the property?

Price falls are a double edged sword, yes prices might fall BUT lenders money might have also dried up by then too.

And lets be honest, not a lot of people have £40k sitting around for a 20% deposit on a £200k house.

Mailman

mailmannz

Bargain_Rzl wrote: »

You'd need to look at having a £15k deposit to bring your required LTV down to 90%.

Well 5% mortgages are gone. Probably wont be long before there are no more 10% mortgages and it cant be too far from lenders only giving you 75% of the properties value.

Of course, this is all in my most humble opinion

Mailman

getmore4less

Basic rule of thumb is repayment mortgage on 100%(less depesit) if you cant afford that then the place probalby not affordable and if you can you don't need to do shared ownership.

If on a high earnings curve then you can bend the rule a bit and consider interest only for a short while.

Shared ownership is going to become a trap for a lot of people.

last time round it was 1beds and studios that no one wanted when the market bottomed out and picked up, FTB could afford the 2 bed places.