Shared Ownership Mortgage

Jumboid

Hello there

I own a 60% share in a shared ownership house with a mortgage from Nationwide.

If I wanted to buy the remaining 40% would I have to remortgage completely or can I take out a separate mortgage just for the 40%

Cheers.

yelf

it is highly unlikely a mortgage lender will lend to a property to which another lender already has a first charge.

Jumboid

theartfullodger wrote: »

What did Nationwide say when you asked them for the extra mortgage??

Cheers!

Lodger

I haven't asked yet... I'm not even allowed to buy any more of the property for another year.

The thing is, I'm in a 5 year fixed mortgage. I'd like to buy the remaining share while prices are relatively low, but if that means completely remortgaging then I'll be liable for an ERC.

But if a separate mortgage is viable, I might save for a deposit rather than overpaying my current mortgage.

it is highly unlikely a mortgage lender will lend to a property to which another lender already has a first charge.

Yeah, sorry I meant another Nationwide mortgage.

getmore4less

Second mortgage from the same lender should be possible.

Don't forget the lending critereia will apply to the total loan not just the 40% new loan

So if the value has droped you need to bring your current mortgate share in line with the lending LTV at the same time.

eg.

£100k 60% share with 10% deposit. 90% LTV lending

£6 deposit £54k mortgage.

Say prices have dropped 10%

New value £90k max new lending max at 90% LTV is £81k so £27k new borrowings allowed.

40% share is £36k so new £9k depost required not the £3.6k 10% of the 40%.

Jumboid

Ah ok thanks getmore4less, this means a bigger deposit than I was expecting is needed.

In your example, would the original £54k mortgage remain separate from the new £27k?