shared ownership or 100% mortgage

blinko

my friend is considering buying her first property and she is going for this shared ownership thingy where she buys like 75% of the property and the council say own the other 25%.

so i was just wondering is it better to go for shared ownership or 100% mortgage i think she is a little worried about risk as she seems to only be focusing on brand new homes with dodgy 99 year leases for extortion prices, hence why she is on the idea of shared ownership !!.

but yeah i was just wondering if anyone else has any views/advice on this thanks

AndrewSmith

On most shared ownership mortgages you will still need a 5% deposit for the share you are buying.

However it is possible to get 100% finance on your share through companies such as Leeds building society etc. It depends entirely on your situation and what you are looking to do.

With shared ownership you want an association that will allow staircasing (purchase of further shares) on a voulentry basis. Also check the level of rent for the share not owned by you.

Hope this helps

Andy

stanmoresaver

AndrewSmith wrote:

However it is possible to get 100% finance on your share through companies such as Leeds building society etc. It depends entirely on your situation and what you are looking to do.

Totally agree with(the learned) Andy, The only thing i would add is that the lenders i've used for 100% of share are notoriously slow and i would seriously suggest using a broker.

SS

lynzpower

I think obviously if she can get a property through the route of open market she should do that. thing is, will she though? I only could get mortgaged for 75k due to my earnings ( I did have a deposit too). Either which way, 75k was the top I could borrow. I wouldnt get a property in london for that, so I went for the shared ownership option.
Depend what the markets like where you are I guess.

mummytofour

Agree, S/O should be used as a last option. Being in a S/O home is never the same as owning your own place as the H/A have teh final word on just about everything.

blinko

thanks all much appreciated yeah im trying to convince her to get 100% instead of shared owner ship, i said whats the point in paying 600 a month and 100 service and rent etc when you could just pay 800 and own the whole thing !!

lynzpower

additionally, the service charge doenst cover "nothing" it covers the hallways & staircases & lifts in the flats (how many leaseholders have problems with that?) and my water rates every month.

I also moved in to a brand new flat, so i didnt even need to buy a tin of paint or anything when i moved in. Although Im doing things slowly ( want it carpeted instead of the laminate for example) i dont HAVE to do anything to it really, and its saved me money when I just havent had it