shard ownership?

system15000

just wondering how does shared ownership work and has anybody had any experience of this, we've seen a house that is 50% shared ownership for £69,950

who would own the other 50% and how would you buy the other share in the long run?

danjberry

a housing association will own the other 50% of the property and you will pay them rent on that share. i believe some associations require you to rent the share for a minimum period before you can buy any of the remaining share, this is called staircasing i think. this can be done by way of remortgaging and borrowing the extra to purchase more of the share or further advances with the lender or simply saving up. please note the housing association will have a second charge on the property so they can object to certain changed made to the property or any further secured borrowing. Also note that most lenders require the mortgagee protection clause to be in force on the property in order for them to lend so ask the HA before agreeing to the purchase

system15000

does anybody know if the northern rock together mortgage will do shared ownership or the coventry bs which is similar to nr together?

MortgageMamma

No neither do shared ownership on the 125% mortgages. the best you will get is 100%. You might find this interesting, I personally think its a better option than shared ownership, as your location and property choices are that which a private buyer would benefit from. http://www.communities.gov.uk/index.asp?id=1162819

system15000

thew reason i ask is we have a loan outstanding for 9000 and a car loan for 3800 so at the moment were paying out 890 per month including council tax and rent, so does anybody know any options of a way to clear the debt into a mortgage?

Graham_Devon

jamiebraund wrote:

thew reason i ask is we have a loan outstanding for 9000 and a car loan for 3800 so at the moment were paying out 890 per month including council tax and rent, so does anybody know any options of a way to clear the debt into a mortgage?

You most certainly will not be able to do that with shared ownership.

The lender is taking a big enough risk with shared ownership as it is. This was my experience anyway.

If your serious, sell the car and get something for £500 - £1000 and buy in cash. They do NOT like loans or anything else like that.

thamespirate

i have a shared ownership property , i tried to get a loan was refused because we are share os , housing associations who run these thing do not budge and are totally unflexible, i went to my bank to try to have debt put on a new mortgage no chance . no chance of staircasing as the other half of my property has gone through the roof , it would cost me double what i pay for my half , to buy the rest, only good point i do alright selling up ,

system15000

thanks for the advice, does anybody know how much we'd be able to get with the figures i gave mine and oh annual income is 30k and dont forget were already paying out 890 a month including loans now so we can afford repayments

Graham_Devon

jamiebraund wrote:

thanks for the advice, does anybody know how much we'd be able to get with the figures i gave mine and oh annual income is 30k and dont forget were already paying out 890 a month including loans now so we can afford repayments

To put it simply, no.

Lenders will not like you with that debt. I been in the situation and had to pay them off. Reality is I could have coped very easy. To them your a big liability anyway with shared ownership.

hsgamboy

I have share ownership in a very nice and expensive area. Would have never afford to buy the whole property. The housing association are great, as part of the service charge I pay they are responsible for building insurance and all other major repairs in and outside the house. The property is a three bedroom worth 170K, bought it about 3 years ago it was £130k back then, so the equity on my 50% is now a massive £27k.

With the Housing association, you can staircase (buy 25 or 50%) any time you want and can afford to do so. I have decided not to stretch myself in doing and happy just to own the 50%. I am in a simlar position as you - earing a joint income of £42k - which means that we can staircase, but I have a CCJ on my name and the only guys that would let me borrow more are sub_prime lenders and i refuse to be taken advantage of. Where about do you live and who is the housing association?

I personally think it's a great way of getting on the property ladder - cheaply. Make some equity on your share - sell up and buy your own place. It currently cost me £510 a month (mortgage+service charge) to live in a nice £170k property in a nice area

MortgageMamma

Hi guys

Would just like to comment from a qualified point of view.

1. Just because the OP has loans does not mean that a lender or housing association will not allow them to borrow on a shared ownership basis. It simply reduces the amoun they may borrow as some of their income will be deducted from the affordability calculations to take account of the loan repayments. The key here is not to overstretch on your new borrowing, to ensure that your mortgage remains affordable.

2. Just because you have a CCJ on your credit file does not mean that you have to go with an adverse credit company. There are plenty of prime lenders who will do shared ownership and who have a flexible approach to assessing adverse credit.

3. If you do have to approach a lender who will lend on adverse credit for any reason, they are not taking advantage of you. Lenders base their products and rates on risk. If you have adverse credit previously you are a much higher risk to them. They market their products to take account of the additional risk they are taking on, and to make a profit. Profit is what a business is all about, where there's a demand there will be someone to supply that demand, and thats what adverse credit lenders do.

There are some lenders who would be willing to advance 100% of your share for shared ownership, but again this is a bigger risk to the lender and therefore you will pay for this.

The openmarket homebuy scheme is a much better alternative to shared ownership in my opinion. Ihave linked this above. The reason I say this is that when you buy a new build property there is little scope on making a profit on it, as its already in pristine condition. I'm not saying you won't make any money at all, but not as much as you would if you bought something that required a little work. You also have the advantage under the open market homebuy scheme to buy the property YOU CHOOSE in and area that SUITS YOU. The downside is there are only a handful of lenders willing to lend on this basis BUT they cover practically every market requirement between them.

Before you commit, take advice.