Shared ownership issue

Richard_Webster

Lenders were always slightly more likely to do 100% on shared ownership because the mortgage protection clause in the SO lease meant that if the lender repossessed and sold on the open market it was the HA rather than the lender that lost out.

I suspect it is pretty unlikely that they would do 100% now, but that doesn't really help OP.

Let us suppose flat now worth £140K. OP wants to by another 15% so he has 50%.

15% of £140K is £21K, so if we assume (very big assumption!) that lender would lend 100% on SO property still, the maximum they would lend altogether would be £70K (50% of £140K) - but Op needs £21K to buy the 15% so unless he has managed to reduce his borrowing to £49K it is non starter anyway.

OP also needs to look at the interest rates involved. Most fixed rates taken out 3 years ago would be higher than the most lenders' SVRs which are now around 4% so OP may well find the SVR is actually lower and there is no point in trying to get a "deal" - better to use the difference gained to save for a deposit ona house.

Greenwellies_2

Having been there, done that with SO, I'd suggest (subject to your finances) buy your next affordable step while the market is low.

We got ours on 50% in 1995. Our rent was as much as our mortgage and they upped it quite a bit each year, which we were never warned about. So we were a bit bitter about it.
We had to renovate the house within 6 months of moving in (it had been reposessed previously) So what with 2 small children, the cost of the renovations, we didn't save any cash. Anything we had was thrown at the house.
Each time we looked at staircasing, we were told we had to pay the HA £X to consider it, then the valuation of £1k, so we were scared to do so, knowing that we didn't have savings to buy the other half out, and we were unlikely to get a full mortgage; and all the time the house prices were on the up. We felt stuck in a rut. To cut a long story short, in 2002 I made an appointment with a guy at the bank as I felt I was going under, based on the loans etc used to do the house up. I couldn't believe it when they offered me a mortgage.
But of course that was based on 50% of the (then) current market value, and my original mortgage (endowment).
Despite spending money on front drive, double glazing, new kitchen, bathroom, boiler, central heating etc, there was no reflection for this in the HA request for 1/2 the value of the home. (However, I did have a good chat to the surveyor, pointing out the house next door, unmodernised had just sold for £x so not to price it like the property up the road that was modernised, which I think helped )

So what I'd suggest is to own the home you are in at the best (lowest) price you can, as soon as you can

Good luck

GW

ruggedtoast

frazer1 wrote: »

I see, sorry im new to this!!

Thanks for your help.

So would they write to me in good time discussing my options? I assume if i cant do anything then they would move me onto there SVR as soon as my current deal expires. In theory then, would i be able to find a new property and just ask them to transfer my new mortgage over to that, albeit i will be on there SVR

You can ask. You're in the negative equity trap though. I dont wish to seem negative but its not called a trap for nothing.

frazer1

ruggedtoast wrote: »

You can ask. You're in the negative equity trap though. I dont wish to seem negative but its not called a trap for nothing.

Im glad your being honest!

How best is it for me to get out this trap then!

frazer1

Greenwellies wrote: »

Having been there, done that with SO, I'd suggest (subject to your finances) buy your next affordable step while the market is low.

We got ours on 50% in 1995. Our rent was as much as our mortgage and they upped it quite a bit each year, which we were never warned about. So we were a bit bitter about it.
We had to renovate the house within 6 months of moving in (it had been reposessed previously) So what with 2 small children, the cost of the renovations, we didn't save any cash. Anything we had was thrown at the house.
Each time we looked at staircasing, we were told we had to pay the HA £X to consider it, then the valuation of £1k, so we were scared to do so, knowing that we didn't have savings to buy the other half out, and we were unlikely to get a full mortgage; and all the time the house prices were on the up. We felt stuck in a rut. To cut a long story short, in 2002 I made an appointment with a guy at the bank as I felt I was going under, based on the loans etc used to do the house up. I couldn't believe it when they offered me a mortgage.
But of course that was based on 50% of the (then) current market value, and my original mortgage (endowment).
Despite spending money on front drive, double glazing, new kitchen, bathroom, boiler, central heating etc, there was no reflection for this in the HA request for 1/2 the value of the home. (However, I did have a good chat to the surveyor, pointing out the house next door, unmodernised had just sold for £x so not to price it like the property up the road that was modernised, which I think helped )

So what I'd suggest is to own the home you are in at the best (lowest) price you can, as soon as you can

Good luck

GW

So maybe staircase up as much as i can to give me a greater share in the property and then sit tight until the situation improves? My rent will in turn go down so i wont be losing out. Its just weather they will remortgage me for the additional amount?

ruggedtoast

frazer1 wrote: »

Im glad your being honest!

How best is it for me to get out this trap then!

Your liabilities exceed your assets. You need to save, or wait for inflation to increase the value of your flat.