Shared equity mortgage

summer78

Hi all my fixed rate mortgage with halifax is coming to an end. I have a shared equity mortgage property bought 2 years ago for 246k. Halifax mortgage is 171k and builder lent £24600 interest free for 10 years.

I am using a mortgage advisor who said there a only two providers that do shared equity mortgages is this correct? The other one being nationwide. Anyone know of any others? Should I just let the mortgage advisor find me the best deal or is there money to be saved doing it myself? Thanks

kingstreet

Are you paying off the second charge?

If not, before you try to do anything with the mortgage, you need to ensure the developer is willing to grant you a deed of postponement.

If they don't, you won't get a new mortgage because the second charge will be promoted to a first charge when the mortgage is repaid.

Have you checked what "product transfers" Halifax have available. These are new deals for their borrowers whose deals are ending.

If you are paying off the second charge, you can go where you like...

summer78

Thanks so much for that info I had never heard if deed of postponement but have just done a bit of reading on it. Am I right in saying I need to contact my building company to get them to agree to give the new mortgage company the first position and then they will be the second charge is that it in a very basic way?

Once and if they agree to that can I approach other mortgage companies? Do you know of any others that do equity share mortgages? I have not had any luck in the ones I have called so far. I agree would be so much better to pay off the builders loan ASAP but that is not achievable for a couple of years.

kingstreet

summer78 wrote: »

Thanks so much for that info I had never heard if deed of postponement but have just done a bit of reading on it. Am I right in saying I need to contact my building company to get them to agree to give the new mortgage company the first position and then they will be the second charge is that it in a very basic way?

That's a good summation. You need the builder's agreement for its charge to remain a second, otherwise the mortgage lender won't get a first charge and won't lend as a result.

Once and if they agree to that can I approach other mortgage companies? Do you know of any others that do equity share mortgages? I have not had any luck in the ones I have called so far. I agree would be so much better to pay off the builders loan ASAP but that is not achievable for a couple of years.

Yes. You can. There are only a handful of lenders who accept shared equity business. You're already with one, hence my suggestion of a Halifax product transfer as your first option. NatWest, Nationwide and Woolwich/Barclays also accept such cases, but I've not remortgaged one yet, so I can't guarantee they will take your case. Your broker knows your circumstances. If he is whole market or independent, he should be able to find the best deal for you.

summer78

Thank you so very much very useful info. I will try them and also see what my advisor comes up with.