Shared ownership/equity is a scam.

poppysarah

richardw wrote: »

So how do they get it through the lender's valuer then?

You mean when people were lending to anything with or without a pulse?

richardw

poppysarah wrote: »

You mean when people were lending to anything with or without a pulse?

But lenders aren't doing that anymore, are they?

Are lenders being more responsible with current shared ownership lending?

Mrs_Arcanum

Shared Ownership properties will not be affected by the new bedroom tax for under occupation purposes. Decision made 30th April 2012.

ali82

I have recently found a shared ownership scheme that I am interested in. It is a 2 bedroom new build flat onthe ground floor with patio/garden, the size of the property looks quite good.

I have downloaded a spread sheet relating to the propertyand here are the figures.


Full Market Value £195,000

35% Equity Value £68,250

Monthly Rent (2.5%) £264.06

Estimated Service Charge £150

Estimated Monthly Mortgage (@ 6.1% APR) 405.55

Estimated Monthly Total £819.61

Deposit 5% £9,750


My questions are,
What could this service charge cover as it seems quite highfor a monthly figure?

Do the SO company choose a mortgage provider as I may beable to get a better deal with a mortgage provider that I know, (even though mycredit file is not perfect).

Can you have a lodger (not tenant) with a Shared Ownership property?

How much can I estimate fees to be for this property, £3000?


After 5 years I would have paid off £24,333 if I choose tostay there that long. Typically 2 bedflats in this area range from £900 - £1100, I am currently renting a 1 bed for£700 and it is no way as nice as this SO flat.



Or rent for another year in that building to see how I like it (they offer something called intermidate rent) and build on my deposit and see how the market goes?


I have not contacted the company yet and have done very limited research at the moment therefore what are your thoughts please?

brit1234

ali82 wrote: »

Estimated Service Charge £150

:eek::eek::eek:

That can't be a normal service charge, I would expect a year pass to Thorpe Park and free pizza every night included.

What rate does the service charge rise at? Is it RPI+X? That will be eating a good portion of your wages every month and they say these schemes are affordable.:rotfl:

On the service charge alone I would walk away.

gazfocus

Do you have a link to the property/Shared ownership scheme?

I think you've misunderstood the shared ownership scheme to be honest. Firstly, if you've got a deposit of £9,750, that's a deposit of just over 14% as the LTV is based on the price of the share you're purchasing, not the full value of the property.

If the purchase price of a 35% share is £68,250, you will be needing a mortgage to cover £68,250 minus your deposit of £9,750 so you will need a mortgage for £58,500 so at 6.1% the monthly payments would be £380.50 (although you can get a shared ownership mortgage at 5.69 so that'd be £365.91)

Where did the estimated service charge figure come from? I would say that's an error and it's more likely to be £15 per month.

Also, your calculation of the amount you would've paid off is way off. You need to factor in the fact that you will be paying interest so you won't have paid off £24,333 of the original mortgage, infact you will probably have paid off about £10,000 over the course of 5 years.

With regards to the other questions, the lease will likely have a clause to say that you're not allowed to sub-let any part of the property so you won't be able to rent a room out, although if it's to a friend, who's to know?

You should be able to choose your own mortgage provider.

ali82

I agree I thought the service charge would be £150 per year, I will call to find out more about this, however they have factored this into the total monthly outgoings?!

I dont have a link as I downloaded an excel spread sheet and this is the infomation that the agent supplied.

This is what it said at the bottom of the page.

“Financial Assumptions:

The above equity shares are the minimum share available tobe purchased. If you can afford to do so you may be required to purchase up toa 75% equity share initially. The above calculations are based on 95% borrowing(5% deposit required). The rate is 5.69% (6.1% APR). It is a 2 year fixed rate.

Written quotations are available on request

Your home may be repossessed if you do not keep uprepayments on your mortgage, rent or any other loan secured on it. Be sure you can afford the repayments beforeentering into a credit agreement.

The above figures should be used for guidance only. Shouldyou require any further information on monthly outgoings please contact us orspeak to an independent financial advisor.”
So would £9750 be a deposit for 100%? how much deposit would be required for 35%

ali82

How did you work out that the amount paid off will be £10k, sorry I'm confused?

Is there an such a thing as an online calculator for SO schemes (lol sorry )

ali82

brit1234 wrote: »

:eek::eek::eek:

That can't be a normal service charge, I would expect a year pass to Thorpe Park and free pizza every night included.

What rate does the service charge rise at? Is it RPI+X? That will be eating a good portion of your wages every month and they say these schemes are affordable.:rotfl:

On the service charge alone I would walk away.

What is RPI+x?

Ulfar

The £150.00 for monthly service charge sounds about right, I would be very surprised if it is £15 a month.