Shared Ownership and DMP

financial_novice

Hi

I hope someone can help, I am aware that many of you are against shared ownership and what it entails, but for me it is my only option to get a little toe on the property ladder but there are a few issues.

I am on a debt management plan. Now I know it is difficult to get a mortgage while on one but I dont need the full mortgage and have a 10k deposit and guarantors, I also intend on using a portion of the deposit to rid myself of the DMP to save the money that went into that to buy a larger portion of the property further down the line.

I have worked out that I can afford it all on a monthly basis even with a slightly higher than normal interest rate. My biggest issue is going to be getting the mortgage for it. A couple of companies have said I need specialist Shared Ownership MOrtgage, is this correct?

If anyone knows any mortgage companies that might help me please can you let me know

Thanks

Rachel

Brock_and_Roll

Welcome!

I have worked out that I can afford it all on a monthly basis even with a slightly higher than normal interest rate

Please remember that a mortgage is a very long term committment, 20 years +. There is every likelihood that interest rates will at some point revert back to or even above their long term average.

Quite aside from the rights and wrongs of buying a shared ownership, you need to see if you could just about afford the interest payments if rates rose to say 8%. That might sound ridiculous at present, but this could happen.

financial_novice

Hi, thank you for responding, I have been on lots of mortgage calculators and tested different interest rates and even if it was to rise to 12% that would be fine as I am not asking for a mortgage that would put me in a tight financial position (have been in a tight financial position in the past hence DWP which is also why I am not asking for the full amount (which I probably wouldnt get anyway) I will NOT let myself get there again!) so this is a carefully considered option.

gazfocus

Don't forget that in addition to the mortgage you will have to pay rent on the share that you don't own.

financial_novice

Yes I have factored the rent and service costs in too, I understand that it will be a bit more money too than renting in total, but for a little bit of my own and not having to share (I have had enough of sharers!) it is so worth it!

mic200202

Your best bet is to see a Mortgage broker.

brit1234

financial_novice wrote: »

Yes I have factored the rent and service costs in too

Have you factored in the rent and service charges will most likely increase faster than your wages?