95% ltv mortgages

poppy10_2

SelbyJay wrote: »

Why should they avoid Shared Ownership?? I dont understand why people seem to think these schemes are so evil. Do these people actually know how they work??

I bought SO 3 years ago and it was the best thing i did.

If you're gonna give "advice" like "avoid like the plague", at least give some reason behind your thinking!

OK, allow me to explain my thinking, using an example. Meet SelbyJay. She bought a house using shared ownership:

SelbyJay wrote: »

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!

She was very happy with the £10k 'profit' she had made :j. Until, that is, it came time for her to try moving house:

SelbyJay wrote: »

I'm not a FTB, want to move, but only have approx £10k equity in my home. I find it frustrating that i cant get a 95% mortgage even tho i'm an existing homeowner whos never got into any financial difficulty.

You see, she could only make a "profit" on her home if house prices were to rise. But if house prices rise, then other properties will rise proportionally higher than her share.
For example, if the average house price rises in value by £20k, her 50% share only rises in value by £10k.

Thus as house prices rise, it becomes harder and harder for her to move house. Although she thought she was on the mythical 'property ladder', she has found out that she is actually stranded on the bottom rung, and the next step up is getting farther and farther away.

In addition, in shared ownership schemes, the costs of the rent and service charges have a habit of creeping up once you are past the introductory teaser rates:

SelbyJay wrote: »

my service charge shot up over a period of 12 months, but my mortgage, rent & service charge combined still cost me about £100 a month less than if i had a mortgage for the full value of my home.

Her combined costs are low at the moment, as she is on her bank's SVR of 3.5%. However, without a fixed rate, she is very vulnerable to interest rate rises. A return to a Bank of England rates at 6% would likely take the SVR to 7% and subsequently double her mortgage payments, leaving her in dire financial straits.

SelbyJay_2

Lets get a little perspective here shall we?

I'm not saying SO works for everyone and there are always risks and negatives with ANY property purchase.

My previous post about not being able to move were aimed more in frustration at the fact that bankers have taken risks with other people's money and lost. Ordinary, hard working people are now suffering with the lack of affordable mortgage credit.

In my own PERSONAL experience, SO has worked. My mortgage would be by no means unaffordable should the IR shoot up to 7% and i am by no means stuck on the first rung of the ladder. The amt of equity in my home WOULD allow me to get a mortgage on another place, but this is not the place my parner and i would ideally want to move to. This is out of CHOICE rather than being stuck.

In fact, when i had my SO flat on the market last year, there were no shortage of viewings and had my circumstances not changed, it would almost certainly have sold. And sold in less than 8 weeks.

If tenants will allow themselves to get in to a mess with rent arrears then they stand to loose their home. I dont see how this differs much to not keeping up payments on a mortgage.

Staircasing might not work especially if couples buy together and may not have the opportunity to earn/save more in the future. I bought when i was single, so if i was to buy a bigger share, with my partner's combined income, we wouldnt have any problems.

There are always MANY contributing factors as to whether SO will work. Part of this comes down to personal circumstances, some could be regional variations in the property market and some will come down to the Housing Association and how they oporate.

In my OWN experience, SO has worked and i will continue to advocate this fact.

Scaremongering that these schemes are scams is useless. People should be encouraged to see if the scheme on offer will work for them.

geoffky

We will see headlines in the next five to ten years about these shared scams where people will be blaming everyone else that they can not move because no one will buy 50% of a house when they can get 100% and the same people will blame everyone apart from themselves..



And evidence suggests that just 3 to 5 per cent of shared owners are able to move on to another property.


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

SouthCoast

Where I live nobody can actually afford the shared ownership affordable housing.

The new builds are either sitting empty or have been let out.

wysiwyg78

I would highly recommend buying a SO home. We have lived in ours for 7 years and it was the best thing we ever did. We would never have managed to afford a 3-bed semi back then and were being laughed out of all the estate agents with our budget. Having this size of house meant we could start a family as we so badly wanted to do, and we now have 2 children.

We are in the process of selling the property. We decided not to purchase the remaining 50% as the schools nearby aren't very good, so it is going to give somebody else a foot on the housing ladder. We are due to exchange next week and it has been an easy sale up to now. We advertised it in the local paper for £80 and had 5 people call up in the first 24 hours. The first family who came to see it got it and have been a joy to deal with.

So unless you actually have experience of living in a SO property then I don't think you can have an educated opinion on them. We wouldn't have been able to get a foot on the ladder and afford to buy a 4-bed home this quickly had we not gone into SO.

Needless to say, I would highly recommend it!

Wysi

aah

this is not a thread about SO it is a thread about 95% mortgages - are there any out there?

ShaolinPunk

Would also be interested in 95% mortgage deals.. anyone have any information on these?

robin_banks

Google - DYOR - contact a broker