Right, going into shared equity from full ownership - am I mad?

puddy

LINDANO wrote: »

I was amazed when I read this post, I thought it was just me in this evil mess!
I have a 110k mortgage, and I need to sell my house as I can't afford the mortgage any more since my adult family all married one by one and moved out, and life changed hugely.
I bring in just £850 a month and my Mortgage alone is £700!
Fine when 6 adults lived here, but as the family have moved out one by one it's now impossible to stay.
It's breaking my heart to lose this house, an ex-local authority property that I have spent over £90k over 10 years extending and doing up to the nines, but, to make matters worse, I stupidly missed ONE payment last year on the Mortgage, when I was off ill, which I paid back over 8 months, and now find that even though I intend to put £60k deposit down on a new property I cannot get a mortgage for the £35k I would need to buy even a half decent house in this area, and by that I mean a small 2-3 bed ex-local authority still, but on an estate this time. Not some mansion.
The Estate agents are all insisting I must rent or buy on shared ownership as this is the only way forward for 'someone like me'.
The world has gone mad I swear!
For you guys though it sounds as tho it may just work, as the house will be the same size and be cheaper to run.
For me, I have 5 Golden Retrievers of varying ages, and 4 cats, and live in the country. I will need to move into a town, that's fine, but
I am going to end up losing most of my pets as I won't have the space in any house to keep them, so far from me being 'responsible', saying ok, I need to sort this before things go very badly wrong, I cannot find any way to turn that isn't bad for me.
I am likely going to end up off work through stress because of all this, as I think I'm going mad with panic, so what now???
I truly wish you guys all the luck in the world.
Linda N.

but if you have a current mortgage, why can you not transfer that to a new property? its called porting, most mortgages you can port. you would then pay off a big chunk of it to make the current mortgage 35k?

have you extended the term of the mortgage to make the monthly payments less? not ideal long term but may get you out of a short term pickle. can you increase your income in some way?

getmore4less

girlatplay wrote: »

Yes, but my point was that with shared equity you sell 100% of your property as opposed to shared ownership where you have to find a buyer for your %share only. As someone posted earlier there are strict rules for selling if you have shared ownership. The rules for shared equity are much more relaxed. Like BadgerFace said, a lot of people don't understand the differences between SO and SE.

When I said I don't think it is as bad as everyone thinks I didn't mean the situation the country is in at the moment!

If there are no buyers for 100% and there are buyers for X% then it does not matter how many restrictions are in place it is still better than HAVING to sell 100%.

AS I have said before the only way out of any sort of shared system is to be able to afford 100% now or in the future.

Which for most people means pay rises or windfalls.

They can work for a higher earner with no deposit in a rising market( or the ability to save) but then they still have the follow on issues to deal with finding people to buy off them.

Eels100

puddy wrote: »

but if you have a current mortgage, why can you not transfer that to a new property? its called porting, most mortgages you can port. you would then pay off a big chunk of it to make the current mortgage 35k?

Mortgage lenders call them portable but they just mean you get to take your current terms and rates with you. You still have to basically reapply for the mortgage and their affordability criteria are a lot tighter than they once were. It doesn't sounds like Linda would meet these criteria on her current income.

Eels100

LINDANO wrote: »

I was amazed when I read this post, I thought it was just me in this evil mess!

Linda, I wish you good luck too (although it seems we both need a bit more than that!)

Incyder

LINDANO wrote: »

I bring in just £850 a month and my Mortgage alone is £700!
Fine when 6 adults lived here, but as the family have moved out one by one it's now impossible to stay.

You obviously have the room for it so get 2 lodgers in at £75 per week each. That will up your income to about £1500 a month.

girlatplay

puddy wrote: »

most people who can afford a non SE property arent going to buy yours

I don't think that actually affects me due to the pilot scheme in place when I purchased. However, I do see your point. The OP asked for an opinion and I gave mine.

puddy

Eels100 wrote: »

Mortgage lenders call them portable but they just mean you get to take your current terms and rates with you. You still have to basically reapply for the mortgage and their affordability criteria are a lot tighter than they once were. It doesn't sounds like Linda would meet these criteria on her current income.

yes, i have done it many times. but its such a small mortgage, her income seems 'affordable' for that amount (35k), you're talking pounds a month

BadgerFace_2

puddy wrote: »

i think what the poster is saying is that if i, as a potential buyer of your 100% comes along, why would i choose to buy your ex social housing property, when i can buy a 100% purchase of the 'average' property? if people cannot afford to buy 100% now in this climate, where are the 100% purchasers coming from in the future. the point is the houses are there because the area, locale or whatever cannot sustain buyers at 100% and its not likely to change in the future.
most people who can afford a non SE property arent going to buy yours, they'll buy someting without that 'history' because they may not want to live on an estate with lots of SE properties.

You're getting SE and SO mixed up again. Under shared equity schemes, the second buyer will have no idea whatsoever that the property was once bought under that scheme...as the purchaser will just make a normal offer for the property, just like any other property.

They are not social housing, though, I believe you can buy some social housing on a SE basis.

Infact under the Scottish open market SE scheme, you can buy any property you like, new, second hand or 'average property'.

BadgerFace_2

getmore4less wrote: »

AS I have said before the only way out of any sort of shared system is to be able to afford 100% now or in the future.

Not true.

Shared Ownership...You can sell your % at any time, but it may be difficult to find a buyer. 100% ownership is not possible with many SO properties.

Shared Equity...You can sell at any time you like, on the open market. There are no restrictions, you are the sole owner. After you've sold, you have to repay the equity stake to whoever you borrowed it from.

Though I would say that anyone going into a shared equity deal who can't afford to pay back the x% in 10 years is bonkers.

puddy

but if its not specifically social housing, are you telling me that you can just buy any old house under SE and some housing association (in the area i presume) will share the equity with you?

i would imagine that these properties are built and owned initially by the HA, then sold as SE, which means that everyone will know the roads, or estates or complexes that they are on?