Remortgaging under shared Ownership scheme

johngrat

Hi,

Our fixed 5yr term at 4.49% is coming to an end soon and I staring to think about remortgaging. A complication to this is that we only own 76% of the propery and another organistaion owns the remaining 24% under a shared ownership scheme (acts effectivey as a deposit to be paid back when property is sold).

I was advised by my current mortgage provider that we would find it next to impossible to find another institution that would allow us to remortgage under these conditions and that we would have to stay with them (possibly spinning a line) on SVR or choosing a new mortgage package. This is not too much of an issue as our lender is fairly competitive but to be honest I would sooner see if I can find anything on the market that is competitive as like anyone else I would like a to reduce my payments from £700 a month.

This would be on a basis of £110,000 over 20 years. This is roughly on a LTV of 60% based on the value when I first purchased the property.

Courtmill

What's the question johngrat?

My partner and I are buying a new build under shared equity at the moment, and have been advised that only certain lenders will remortgage as shared equity is noted as a second charge againt the home, and the mortgage. However our lender is competitive and we're happy to stay with them if needs be as we only have 10 years MAX to pay off the second charge.

I've been doing digging recently though, and I think with LTV of 60%, you should be able to get a few deals. My parents have a shared equity home, and they never have a query regarding this when remortgaging.

It's worth doing some quotes now with some different companies and seeing what offer you get, if nothing. Then you can go back to your current lender, and either challenge them to beat a better rate, or you can move on.

johngrat

I was wondering if this was correct and if I was likely to run into any issues when changing mortgages.

Also are there specialist brokers that might be able to help me find a competitive rate?

Courtmill

From my limited knowledge, I'd say this could be true, but it depends entirely on the T&C's of the shared equity scheme. If you only have to mortgage for your portion, and not the whole 100%, then you may run aground.

Best bet is to speak to your current mortgage provider and ask them what they'll be offering you. Then dig around for some other quotes, and if you get a better one get your current provider to quote again.

There aren't any specialist shared equity mortgage providers... just there are plenty who will not cover shared equity.

johngrat

I will only need to mortgage for the 76% that I hold because the loan provider effectively put down the 24% as a deposit. When I move on I pay them back 24% of the sale price whether the value increases or decreases.

I think I could have some problems with this then