1st time buyers - Shared equity scheme

JandS

Hi,
We've been looking at houses and barrats are offering a 25% shared equity scheme meaning that we only have to find a 5% deposit (£5000). We are not really sure what mortgage we will need or how to apply for it.

Do we need a special mortgage and will we end up with 70% LTV.

Many thanks

J and S

Bexm

Hello!

Depending on whether you will actually be able to buy the rest of the house or not depends how difficult it will be for you to get a mortgage..
If you can buy the rest at some point, most lenders should lend to you..

The amount you borrow is against your share of the property, so say the house is worth 150,000 and you are buying 80% (120,000) 120,000 is 100% of your mortgage, the other 20% doesn't come into it.. so just because you are buying only some of the house it doesn't put your LTV down...

Make sure you check out the terms of the shared ownership scheme before you buy into it, for example if repairs need to be made, who's responsibility it is, and will barretts contribute, and most importantly how easy is it to sell, for example is there any criteria that needs to be met by potential buyers.

We're currently stuck with 80% of a house as our agency assesses everyone who buys it, and only certain people fit the criteria...!
Also they wouldn't pay towards any repairs or anything, but anything we wanted to do to the house we had to get written permission for, and usually they'd be awkward as hell!

Hope this helps

Bex