Help needed - Shared Ownership

MrsMoneybags_4

Hi everyone,

My partner and I own a 50% share in an apartment and we rent the other half.

We are now in the position that we have an additional £500 per month available to us and we want to put it towards overpaying the mortgage, however we are not sure whether to overpay the half we own or buy the other half which would leave less to overpay with every month. Anyone know whats best?

Also, do you think it would be easier to sell the apartment owning the 50% share or 100%?

Any advice would be a great help, thanks!

BexInLondon

There are two questions here:
1) should we buy a bigger share or overpay on our current share?
2) would it be easier to sell if we owned the whole thing?

In respect of 1, it does depend on a lot of things. If it seems like prices have bottomed out in your area (and no-one really knows what the housing market will do) then it might be a good time to buy more. However this will be affected by the equity (difference between the value of your share and the outstanding mortgage) in your current share, as if you don't have enough equity and/or deposit you won't get a mortgage on the rest, or you might get a bad rate. If a few months of overpaying would tip you into a different LTV bracket then you could look at staircasing then, rather than now. It does really depend on a lot of factors!

In terms of question 2, you need to find out what the scheme rules are on this. Some shared ownership (SO) properties must remain SO, so you'll still only be able to sell to certain people even if you own the whole thing. Others have less restrictive rules, so you'll be able to sell it to whoever you like, or rent it out, once you own the whole thing. Hopefully the pack you'll have received when you got the place will tell you what you need to know here, but if not, give the HA a call! Generally having a bigger pool of potential buyers is a good thing, as some people have found it difficult to sell SO places on!