Shared Ownership Mortgage help?

jammy26

I do not have the best credit record I have some late payments earlier this year (due to me not budgeting correctly during my final term at uni) I don't have any defaults or CCJ's.

I have been offered the chance to buy a shared ownership property at a value of £140,000 with me buying a 50% share. I am currently in my probationary period at work (social worker) which finishes in a months time.

I have a small amount of personal loan left to pay which finishes in December and about £3000 in savings.

Do you think anyone would offer me a mortgage or should I continue renting for a while?

beecher

Continue renting and start seriously saving, especially once you've paid off your loan. Build up your credit report and deposit/fees savings account, and take it from there.

jammy26

trouble is I have very little disposable income for saving as my rent is quite high, I worked out that on an interest rate of 7% and with the rent the HA charge I would be about £250 a month better off! Once my loan is finished I will be able to save about £125 per month so is going to take me a long time to save a deposit!

poppy10_2

Shared ownership is a scam. Avoid.

How much rent are you paying at the moment, and for what kind of property? And what kind of property is the shared ownership?

beecher

Why not share a flat with someone to cut down on rent? Or lodge with someone? Debt Free Wannabee forums will give you help on cutting back on bills to help save more.

jammy26

I am currently paying £600pcm for a studio flat. The shared ownership property is a 2 bed house which I would rent the 2nd bedroom to me friend for £75pw plus half of all bills therefore my cash flow would be much better.

Can I ask why shared ownership is a scam, to me it looks like a really good way of improving my outgoings and my income is likely to improve dramatically within the next five years so I would be able to buy further shares in the property.

Can anyone answer my original question about if I am likely to be able to secure a mortgage?

poppy10_2

You would likely need at least a 10% deposit, so on your 50% share of the £140,000 property, you will need £7000. Keep saving.

sturgeon

poppy10 wrote: »

Shared ownership is a scam. Avoid.

Absolute rubbish. This kind of sweeping statement is seriously unhelpful as it's entirely untrue.

Mrs_Bumble

Shared ownership on the new builds have a tendency to be a bit pricey and then when you work out what you are paying for say 50% of the property, then rent on top, then eventually you have to hope that the property value goes up enough for you to purchase some more of the property, if the value doesn't increase sufficiently etc, etc.

Even if you are accepted for a shared ownership mortgage you are going to need 15-20% deposit to put in for the shared ownership as the lenders now want a deposit from you as well so doubt that your deposit will be big enough, plus you will need funds for solicitor costs, valuation fee etc.

In relation to your credit history what exactly is showing?

The probationery period complicates things as well.

I think that Beecher has given very good advice.

geoffky

sturgeon wrote: »

Absolute rubbish. This kind of sweeping statement is seriously unhelpful as it's entirely untrue.

Shared ownership is failing to act as a stepping stone to full home ownership, leaving many people in worse positions than if they lived in other types of housing, researchers have found


http://www.insidehousing.co.uk/story.aspx?storycode=6501770

SelbyJay_2

Shared ownership isnt a scam at all. I bought SO and it was the best thing i did. I bought 50% share of a flat for £42500. 3 years down the line, i've made £10k profit. I could never have saved £10k in that time, even living with my mum!

You do need to be careful with SO and make sure you fully understand the pros and cons. Even now my mortgage payments are mega low, my combined rent & mortgage still costs me about £100 a month less than if i had a mortgage for the full property value.

I was lucky cos i bought as a FTB and i was single. I'm now in a relationship so (with my partners income to take into account) we can afford to buy another place or more of our current place. If couples bought SO, there's not much chance their income will improve massivly and buying a bigger share may never be an option.

SO wont work for everyone, but it certainly isnt a scam.

So all you that say SO is a scam, get ya facts right.