Shared Ownership - Increasing stake

EdFitz

Hi

I currently own 50% of property and am interested in upping my stake to 100%.

I need to understand what deposit I will need to increase from 50% to 100%. I am assuming I will only pay deposit on the extra 50% i am buying but if anyone can clarify that would be great

Thanks

Ed

Richard_Webster

Do you mean how much of your own money will you need to put in?

How much do you owe on your present mortgage?

How much do they want for the other 50%?

It will depend on the loan to value ratio that your lender is prepared to lend.

Say you got a £50K mortgage and bought the 50% for £50K. If the 100% value is now £120K you will need to find £60K to buy the other 50%. If your lender will now only lend 80% loan to value then the maximum they would lend on the property would be 80% of £120K, which is £96K, so you get another £46K from the lender on top of the existing £50K loan and you have to find £60K-£46K = £14K.

If the 100% value is now £80K then you would only have to find £40K from somewhere to buy the other 50%, but your lender would only lend you a total of £64K (80% of £80K) so you only get £14K more on top of your existing loan and would have to find another £26K of your own (£40K-£14K).

paulsin

I;m not certain, but my understanding is that when you up you stake, your whole stake is considered. i.e. say you bout 50% for 60k (total value 120k) with 10k deposit, i.e. 50k mortgage and the house is now only worth 100k. You would have little of no equity. Therefore to buy the other 50% you would need 10/15% (whatever the mortgage states) deposit i.e. 10k or 15k. So it would depend on house much your current stake is worth.