Shared equity mortgage help

coffeebreak_2

Thanks - guess I need to do a bit more research! This particular development isn't part of Homebuy, although it used to be but now there is no mention of it. I'm sure many of the rules however will be the same. My mortgage broker is refusing to return any of my calls anyway so perhaps it's a blessing in disguise.

getmore4less

coffeebreak wrote: »

Is shared equity as bad as shared ownership? It seems like such a good scheme. I would be buying 75% and the developer would put in the remaining 25%, which I buy off them after 10 years (or before). Deposit isn't an issue but with the mortgage I can get it limits the type of house I can get. I had been looking at two bed terraces, which realistically I'd only want to stay in for three years or so. With this scheme I can get a four bedroom house with garden and parking that I can see myself living in long term. However I don't want to be scammed!!

Check the details( here are a few),

is the 25% rent free
who pays for a valuation whne you buy the rest
can they choose a future purchaser
is it freehold

Important where is the money for the other 25% coming from

If you are actually saving/overpaying as if you had the larger mortgage then that can be an OK plan, still not totally risk free.

more research

Allthough planning long term think about if something means you have to move can you get out.

Muhasib

This is a very useful thread:

But you don't have ALL the restrictions of renting while buying:

I can think of some -

that you wouldn't have a Landlord coming around to inspect the property and preventing 'quiet enjoyment'.

You can repaint the walls in your own scheme, you can put up picture hooks and nails in the walls.

You don't get notice to leave every six months or the rent going up.

You don't get fobbed off when the heating breaks down until you keep phoning up enough that something gets done.


Try to think about the situation from someone currently renting putting up with this rather than always saying it isn't as good as owning 100% equity.

coffeebreak_2

I have been renting for 7 years so I can emphasise with the post above! It would be so nice to be able to put photos up on the wall, or wallpaper! I'd love to be able to choose my furniture too, intstead of putting up with the furniture that came with my rented apartment!

Renting has been the only option for me and I don't look at it as dead money because what else whas I supposed to do? Live on the street?! But now I have the desposit saved up it's time to make the move and FINALLY be able to choose my own paint colours and carpets!! Small things eh?!

poppy10_2

muhasib wrote: »

that you wouldn't have a Landlord coming around to inspect the property and preventing 'quiet enjoyment'.

Landlords are legally barred from preventing quiet enjoyment

You don't get notice to leave every six months or the rent going up.

Homeowners on variable rate mortgages face the prospect of their payments going up every month as the BoE meets to decide interest rates

You don't get fobbed off when the heating breaks down until you keep phoning up enough that something gets done.

No, you don't get fobbed off, because it is your responsibility to sort out the heating yourself, and pay for it yourself. Doesn't sound like an advantage to me.


Of course there are some advantages to home ownership, but with shared equity/shared ownership many of these advantages are taken away from you, while you are left with the responsibilities and costs of ownership. It truly is a con.
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Muhasib

poppy10 wrote: »

Landlords are legally barred from preventing quiet enjoyment



Homeowners on variable rate mortgages face the prospect of their payments going up every month as the BoE meets to decide interest rates



No, you don't get fobbed off, because it is your responsibility to sort out the heating yourself, and pay for it yourself. Doesn't sound like an advantage to me.



Of course there are some advantages to home ownership, but with shared equity/shared ownership many of these advantages are taken away from you, while you are left with the responsibilities and costs of ownership. It truly is a con.
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1. They are, but they also have to be educated to face the reality of that - in the meantime you do have to put up with it in some cases while renting.

2. True, so get a fixed rate.

3. If you are in your new shared equity property it is a lot less likely your heating is going to pack in whereas getting a landlord to shift themselves to sort it out may take a little longer if you are renting

4. I was only concerned with shared equity as that was being looked at by the OP (and Homebuy Direct being what you helpfully posted the extract from), shared ownership is a different matter I agree. You had originally posted that you get 'all the restrictions of renting' so I pleased that you have revised your view.

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coffeebreak_2

Quick update...

Mortgage broker (the one the developer suggested using) ignored all of my calls and emails so I went direct to the bank (after speaking to another mortgage broker). Got an agreement in principle with Woolwich... rung the sales woman to let her know but she didn't answer any of my calls (I get the feeling my calls were being screened as this was a regular occurance).

So, I drove round to the showroom and placed it on her desk. She informed me that somebody had beaten me to it, however something had gone wrong with their full mortgage application and there was a chance that the house would still be mine. She promised she'd call me.

She never did call me and instead I had to find out that the house had sold by looking on their website.

To be honest I think it was a blessing in disguise as they certainly aren't the type of company that I'd like to be tied into for 10 years.

I'm now looking at cheaper houses that I can buy on my own.

This is just my opinion... some people have had much better experiences and I do think the scheme has it's benefits, however this particular developer and the mortgage broker they recommended have been an absolute nightmare to deal with and it's put me right off!!!