Shared Ownership Staircasing

A2H_GO

We took our SO mortgage(gasps) out in August 2009. The property was £115,000, we mortgaged 25%, so £28750 and put about £6k down at the time.

We've now managed to save up a further £3,500 and are contemplating staircasing to owning 100% of the property. The mortgage stands at around £22k and i'd imagine the propertys still valued at £115,000, meaning the other 75% will cost us £86,250. Making the total mortgage £108,250 minus the £3k we have saved, so £105,250.

This puts us at 92% LTV. To come in at bang on 90% LTV we would need another £2k which would take us around 4-5 months to save up.

The question is, do we save for another 5 months and pay a further £1250 in rent during that time and go with our current mortgage provider(Halifax 6.29%) who will offer a maximum of 90% LTV OR move to someone offering 95% LTV such as Skipton BS(6.49%) and sort it now?

dimbo61

Why do you think the flat is still worth £115K ? recent sales !
How much are you paying in rent for the other 75% is it £250 a month ?
It will cost alot more than that in mortgage payments to buy the other 75%
Can you overpay the 25% that you already own or build up savings to buy a large share.
£105500 at 6.29% over 25 years is about £700 a month but rates will go up and hence your mortgage payment.
Unless there is a very good reason that you think the flat is going to jump up in value ( outside William& Kate new home!!) I would carry on overpaying the mortgage and build up your savings to get a good long term fix with the best LTV you can manage

A2H_GO

Thanks for your response.

I think the house will still be valued at £115,000 as they are still selling them at that price.

Yes we pay £250pm rent on the 75% and we understand that the 100% mortgage will be around £700pm which we can afford.

Either way we want to get off the SO scheme as soon as we can as we see the rent as dead money each month. Were just not sure whether its better to go for a 95% mortgage now or a 90% mortgage in 5 months.

dimbo61

Think you will struggle to get a 95% deal and will get a better deal if you have 10% equity but you need to see how much the other 75% will cost you

A2H_GO

We do need to get a valuation so we can see exactly how much the other 75% will cost us but we dont want to pay £315 with Halifax to have this done to find out we haven't got enough money, in which case we could just go with Skipton.

dimbo61

In the last 2 1/2 years you have only paid off £6500 of the mortgage debt and now you want to take on a £100K plus mortgage when rates may well rise this year!
Overpay your existing mortgage by £500 a month for the next 12 months and see if you can afford to do this without borrowing or running up other bills.
Consider a long term fix 3/5 years if you plan on staying long term for security