Shared Ownership Mortgages

Viks24

I Really don't understand why everyone has such a big issue with shared ownership properties??

I have owned one for the past 3 years and never had a problem, even when it came to selling it, it only took a couple of months and we even stand to make a profit!

They are a brilliant idea for people just starting out in the housing market, and provide a much nicer home than if you were to buy what you could afford on the open market.

Back to the original post, we have our mortgage with Leeds building society, they were such a big help when we were arranging it 3 years ago.

Hope this helps

garreh

Mallotum_X wrote: »

Make sure you read up on the horror stories first, then make your mind up.

Personally I wouldnt go anywhere near one of these schemes. - Own a percentage and pay ren plus pay 100% of all repairs....

Your paying rent at well below market value. Under these schemes the government is actually losing money because of the rediculously low rent rates.

The repairs rate is set by the housing association (or whoever you've got the share with) and you'll be informed of any monthly costs, etc. Usually your paying a percentage to maintain communal areas, such as gardens, rooftops, etc. For inside the home you normally have to financially maintain it purely yourself.

This is from the research I've done, I don't actually own a shared mortgage, I assume you have? I'd like to see some of these alleged "horror stories" as I'm in the process of deciding to do part-rent part-buy scheme/shared ownership.

geoffky

brighteyes88 wrote: »

Very mature.

Some people and we see them on here all the time put more consideration into buying a ipod than they do buying a house.
Because if you really sat down and worked out the system of shared ownership you would not go near them at any cost and i consider the people who do as financially illiterate.
short term gain for a long term headache.. its like people who took out 120% mortgages i would class them people as the same...

garreh

geoffky wrote: »

Because if you really sat down and worked out the system of shared ownership you would not go near them at any cost and i consider the people who do as financially illiterate.

I think the point is people just aimlessly throwing comments "don't touch them" without any examples to back them up isn't very constructive advice. Everybody has their own individual situation which should be at the forefront when giving advice.

Have you owned such a shared mortgage? Please provide examples of cost to actually show it's for the "financially illiterate".

I'm very interested in hearing your advice because I'm in a situation where shared ownerships look like the most feasible option to get on the market, but I can't even begin to base my decision on throwaway comments without any factual figures to back them up.

stupndus

garreh wrote: »

I think the point is people just aimlessly throwing comments "don't touch them" without any examples to back them up isn't very constructive advice. Everybody has their own individual situation which should be at the forefront when giving advice.

Have you owned such a shared mortgage? Please provide examples of cost to actually show it's for the "financially illiterate".

I'm very interested in hearing your advice because I'm in a situation where shared ownerships look like the most feasible option to get on the market, but I can't even begin to base my decision on throwaway comments without any factual figures to back them up.

I have registered on this forum just to respond to this thread. I bought a house with Shared Ownership scheme (Mychoicehomebuy) 2.5 years ago from MHO. The initial process to get the approval + mortgage was challenging and required a lot of persistence and followup on my part. Once it was all done, there have not been any issues. The financials stand as follows:
1. Price of house: 247,000 (in London Zone 5)
2. MHO share: 20.5%
3. Down payment: 4.5%
4. Mortgage: 75% (185,250)
Mortgage term 25 years

Now over the last 2.5 years I have paid mortgage (repayment) on the 75% and rent on the 20.5%. The rent has been around £75 per month (increasing every year based on CPI)

Why I went for this scheme was simply because I could not afford the full price and no one would provide me the mortgage for the 95% LTV if I had somehow managed it. Additionally, I would have found the repayments on the 95% challenging.
Now after 3 years, I am expecting the outstanding mortgage to be 70% (£172,900) of the original price. Assuming that the house price is still 247000, then my share would increase to 9.5%.
If I had rented then the rent for this house in open market is between 1100 to 1250. The mortgage plus rent that I have been paying is not higher that this , hence I believe that I have been better off by going through this route.

Assuming, if the house price would have reduced by 10% then after 3 years:
1. house price would be £222,300
2. Outstanding mortgage = £172,900
3. MHO share = 20.5% = £45,571
4. My share: £3,829 (positive equity)

However, if I had taken a 95% mortgage then after a 10% decrease in house price, if I had still repayed 5% of mortgage after 3 years (unlikely), I would be at zero equity.

I hope the above is helpful. My advice, go for it and try to reduce the equity share of the housing association or whichever agency is providing the equity to as little as possible as the market is now pretty much is at the bottom (in my humble opinion), but at the same time ensure that overall the payments are affordable.

P.S I have found Santander rates to be the most competitive.

brit1234

stupndus wrote: »

Why I went for this scheme was simply because I could not afford the full price and no one would provide me the mortgage for the 95% LTV if I had somehow managed it.

Why not save a bigger deposit and get a normal house.

I looked at both shared equity and shared ownership a few years ago and the sums didn't add up. I'm now more aware how builders and housing associations use them for there profit rather than that of the first time buyer.

Shared ownership is a scam.

garreh

brit1234 wrote: »

Why not save a bigger deposit and get a normal house. Shared ownership is a scam.

It's not just about a deposit, it's about how much banks will LEND you. For someone with a 22k salary, they will lend around 66k. Assuming you had 40k deposit that's 106k spending power.

Unless you want to live in a rabbit hutch how on earth can you get a reasonable property for 106k if you commute to a job in London/Greater London?

Yet again "shared ownership is a scam" another throwaway comment without any figures to back it up.

By the way did I mention the queen is a transsexual? No? Ahhh I don't need to give you any evidence, just believe me.

brit1234

garreh wrote: »

It's not just about a deposit, it's about how much banks will LEND you. For someone with a 22k salary, they will lend around 66k. Assuming you had 40k deposit that's 106k spending power.

Unless you want to live in a rabbit hutch how on earth can you get a reasonable property for 106k if you commute to a job in London/Greater London?

Yet again "shared ownership is a scam" another throwaway comment without any figures to back it up.

By the way did I mention the queen is a transsexual? No? Ahhh I don't need to give you any evidence, just believe me.

Firstly please don't abuse our head of state, you may not hold her in high regard but that does not give you the right to be so vulgar on a public forum. After all we are subject and not citizens with many of us pledging to defend her and our country.

Back to your question. The reason you can't afford a deposit or can't get a mortgage high enough is because we have had a decade long housing bubble. This bubble was caused by to low interest rates, mass fraud, property speculation, property pawn TV and most of all loose lending. Shared ownership, shared equity, 125% mortgages, Option arms, sub prime lending, interest only are all examples of this loose lending. All this nearly brought the economic world to its knees and we are continuing to suffer in a downward spiral now.

Simply putting it the banks do not have enough money to support the housing bubbles peak prices. Hence prices are falling. Yes you may not be able to buy now but you will in the future as prices continue to fall. Shared ownership represents one of the few loose lending methods left however its funding is being phased out.

You want to buy into the scam then go ahead, I hope you taste all the many delights of this scam.

leveller2911

garreh wrote: »

The repairs rate is set by the housing association (or whoever you've got the share with) and you'll be informed of any monthly costs, etc. Usually your paying a percentage to maintain communal areas, such as gardens, rooftops, etc. For inside the home you normally have to financially maintain it purely yourself.

This is from the research I've done, I don't actually own a shared mortgage, I assume you have? I'd like to see some of these alleged "horror stories" as I'm in the process of deciding to do part-rent part-buy scheme/shared ownership.

I think you need to research a bit more because with many Shared Ownership the tenant/part mortgage will be responsible for 100% of the repairs/maintenance.I would also say that many of the shared ownership schemes will never allow 100% ownership, the reason being that it should limit HPI and the house would remain a starter home, remember about 5 years ago we had the 1st ex council house valued at £1 million........

brit1234

garreh wrote: »

It's not just about a deposit, it's about how much banks will LEND you. For someone with a 22k salary, they will lend around 66k. Assuming you had 40k deposit that's 106k spending power.

Unless you want to live in a rabbit hutch how on earth can you get a reasonable property for 106k if you commute to a job in London/Greater London?

Yet again "shared ownership is a scam" another throwaway comment without any figures to back it up.

By the way did I mention the queen is a transsexual? No? Ahhh I don't need to give you any evidence, just believe me.

Firstly please don't abuse our head of state, you may not hold her in high regard but that does not give you the right to be so vulgar on a public forum. After all we are subject and not citizens with many of us pledging to defend her and our country.

Back to your question. The reason you can't afford a deposit or can't get a mortgage high enough is because we have had a decade long housing bubble. This bubble was caused by to low interest rates, mass fraud, property speculation, property pawn TV and most of all loose lending. Shared ownership, shared equity, 125% mortgages, Option arms, sub prime lending, interest only are all examples of this loose lending. All this nearly brought the economic world to its knees and we are continuing to suffer in a downward spiral now.

Simply putting it the banks do not have enough money to support the housing bubbles peak prices. Hence prices are falling. Yes you may not be able to buy now but you will in the future as prices continue to fall. Shared ownership represents one of the few loose lending methods left however its funding is being phased out.

You want to buy into the scam then go ahead, I hope you taste all the many delights of this scam.