Shared Ownership

msw_2

Hi,

I've been living in rented accommodation for years and have decided to [try and ] bite the bullet and buy a property. I have recently started to look for a property and it is totally depressing to see what you get for your money these days. Anyway, I have stumbled across a shared ownership property which looks worthwhile. It is a 3 bed semi and we could buy 60% of it at a cost of £130k. We would pay just over £100 per month to the local council as rent on the other 40%. When I called the EA for info they mentioned that I may need to have a big deposit as some lenders "don't like" shared ownership. Does anyone know why? Any other info on whether shared ownsership is a good idea or not, things to look out for etc would be appreciated . I really have no experience of this but think I would need to act soon to have any chance of getting it as it seems like such a good deal.

Thanks

MortgageMamma

from my experience you do not need a bigger deposit for a Shared Ownership property, as the reason they are Shared Owmership in the first place is to help eligible FTB's onto the property ladder. Sounds to me like the estate agent was trying to frighten you into seeing their own advisors. There are LOADS of lenders willing to lend on a shared ownership property, your best bet is to see a local fee#s free whole of market (access to all mortgages on UK marketplace) mortgage advisor and see what they come up with. Also for info most shared ownership mortgage providers rates are the same for SO as with a conventional house purchase

jaws77

Your local council or Housing Assosiation will be able to give you a list of lenders who are happy to provide morgages for Shared Ownership schemes. We used Portman when we bought our house. Also Nationwide will do them if you have 5% deposit.

rchddap1

I didn't need a big deposit. Eventually I placed a deposit of 3%.

AndrewSmith

To be totally honest,

Most lenders will look at shared ownership if you have a 5% deposit on your share.

If no deposit then it is still possible through the likes of The Leeds or The Lambeth building society etc.

The Estate Agent in wrong.

Andy

msw_2

thanks for your respsonses - I thought it seemed a bit strange...

lynzpower

Ive got my SO mortgage with Abbey, no problem whatsoever was offered Yorkshire & Halifax too. that was over 2 years ago so bound to be more lenders on board. I did have a small deposit of about 6k, but they did offer me 100% if I wanted it.

Sounds like not a bad deal that to me OP, Ive got shared ownership ( in london though mind you) and I think its a bit of a rip off, and im not convinced of the HA TBH. Saying that its a shared block, so Ill get loads of issues to contend with that you wont have.

If I had my time over again, I would ask better questions earlier on. I wish Id said when I was viewing it, do you have the management co in place? Has the property been registered with the land registry, are you sure of your boundaries at this stage- purely cos those were the things that stuffed me when I was buying, dragging out the process for 7 long painful and expensive months.
the relief of the keys in my hand were something I'll never forget!

livinginhope

We nearly bought a SO house many years ago,but were a bit naive thinking that if we bought 50% at say 50k,in a few years down the line if we wanted the other 50%,you wouldn't pay 50k,but you would have to pay 50%of the current market value,so if the house went up to 180k you you would then pay 90k for your share,nearly the cost of the house to start with,so you probably would never end up owning the house.Hope that makes sense,I do ramble!

Tassotti

What happens if the buyer fails to repay the mortgage? How do lenders repossess 40% of a house?

makingendsmeet_2

We have just got a 100% mortgage on a shared ownership property. The only thing I would say is that the lender and the solicitors and even the HA seemed to be very slow. We are now just over 4 months down the road and still no idea of a completion date. Don't forget the check other costs involved too legal fees tend to be much higher that traditional lending. Intrest Rates on Shared Ownership mortgages are higher too. As for reposessing 40% that wouldn't be a problem for a lender as the HA have a listing of people wishing to enter into Shared Ownership, so they could buy the share from the building society, no doubt means more paperwork, hence the higher intrest rate you pay.

JoeyEmma

We looked in to the cost of SO (I'm a nurse, he's a teacher).

The nearest scheme near us would have worked out at about £1000 month, once you included mortgage, rent and the service charge for the building.

Suprisingly, not many other people have signed up for the SO flats since we looked at them. Its stupid, they out price the very people they are trying to attract.