Shared ownership mortgages

vernon_dursley

18 years ago my wife took out a shared ownership mortgage of 40%, leaving the other 60% as rent to be paid to the housing association.
With 7 years left on the repayment mortgage and with the rent having greatly increased, looking long term to retirement (20yrs) we would like to purchase the remaining 60% of the property.
Due to family circumstances, although my wife is solely named on the mortgage documents my very modest income is that which actually pays the mortgage.
Is there any way in which we can purchase the remaining 60% of the house without overpaying for it and so securing our property for us when we retire.

kingstreet

In the first instance, I suggest you make informal enquiries of the housing association concerned to establish their criteria for purchasing the remainder and how the value is set.

Once you've done that, you should contact a whole of market or independent broker to see the best way of financing the purchase as it will probably be a good idea to move to a whole new joint mortgage, rather than try to use the current one with a transfer of equity when you're to be included.

vernon_dursley

I will contact them tomorrow morning.
I have already approached them about buying back our 40% but they tell me that they have no funds available to do so.
I have also asked the question if they give any kind of discount against the 60% share they own like local councils used to do when selling homes to their tenants but as yet have had no reply. ( I won't hold my breath as I may die while waiting ! )
I am presuming that they will still allow us to buy more or all of their share but I will double check with them.
To be honest I don't think I will be able to get a full mortgage for the whole of the property based solely on my wages, so a major percentage may be the better option.
We certainly couldn't sell up and try to buy another house.
If we do manage to secure another mortgage on the property, would we have to pay all over again for land searches, valuations etc ?
I wish we could start all over again from a good few years ago,
I certainly would not ever recommend shared ownership to anyone.

kingstreet

Purchasing additional shares, or staircasing as its known, is written into the lease provisions when you first buy.

You may be able to buy in 10% or 20% chunks, upto the remaining share to make your ownership total.

You may have to pay another valuation fee, but should escape the cost of additional searches.

Here's some info from another housing trust I found with a quick google;-

http://www.somer.org.uk/PDF/Staircasing.pdf

poppy10_2

vernon_dursley wrote: »

I have also asked the question if they give any kind of discount against the 60% share they own like local councils used to do when selling homes to their tenants but as yet have had no reply.

You won't get any Right to Buy discount on a house you already part-own

Thumper7

I have done exactly what you are proposing. I am in Scotland though, but this is what happened in my case.


1991 purchased 25% of property with rent of 75%, property valued at 47000 I had mortage of 11,750, IO unfortunately

2003 decided I ought to purchase rest. I contaced Housing Association who arranged for Assessor's Office to value property (for which I had to pay). Property value came back at 64,000 so 75% share was 48,000 to purchase.

In order to secure new mortgage of 59,750 (11750 + 48,000) the mortgage company insisted I get another valuation done, which came back at 70,000.

I actually had to get 2 valuations on the property, one for the Housing Association and one for the Mortgage Company. The Housing Association had to abide by the valuation from the Assessors Office.

T

vernon_dursley

I contacted the housing association regarding the purchase of more sha.res in the house and the person I spoke to suggested I didn't bother buying any more.
What they said was that if I stayed as I was with 40% and let my current mortgage finish in 7 years, when I retire in 17 years or so the government would pay the rent to the housing association as I did not own all of the property and did not have any substantial savings.
I was a bit taken aback with this, is it right ?.

brit1234

vernon_dursley wrote: »

I contacted the housing association regarding the purchase of more sha.res in the house and the person I spoke to suggested I didn't bother buying any more.
What they said was that if I stayed as I was with 40% and let my current mortgage finish in 7 years, when I retire in 17 years or so the government would pay the rent to the housing association as I did not own all of the property and did not have any substantial savings.
I was a bit taken aback with this, is it right ?.

Even if that is right today, will it be right in 17 years time. My pension was meant to be protected the next 22 years and now they are changing that. Don't base your life on what might happen in 17 years time.