Shared Equity - Investment companies??

taliwillow

Hello all,

My husband and I are looking at moving house and we will need a 100% mortgage. 100% would be £220k. We can afford the repayments and our mortgage lender would lend us up to 220k but unfortunately they will only lend up to 95% LTV. We need to stay with our lender due to the very high redemption penalty if we leave them (we have a fixed rate) and we have a very good rate with them at the moment (4.94%) which we would like to keep. We can port the existing deal and will just need a top up at the current rates to buy the new house. Unfortunately we have no way of raising the 5% deposit at the moment but I have heard that there are companies who buy a percentage of the property and then you pay them back that percentage when you sell the property. Does anyone know of any companies that offer this service in the Oxfordshire area? We only really need an investment of 5% but would consider a higher investment (I have heard that a lot of them like to invest 25%.

Any advice would be very much appreciated as we desperately want to move and we have seen a house that we would love to buy.

Thanks

Taliwillow

Ian_W

Personally haven't heard of such companies nor have I ever seen mention of them on these threads over the past few years. It would be a very risky investment for them - probably very expensive for you as a result - bearing in mind that the mortgage lender would insist on having the first charge on the property. So if you defaulted they'd be reliant on your property fetching quite a bit more than you paid for it to cover the repo, sale and mortgage before they got their cut.
Some lenders also, I believe, want to know where the deposit is coming from as they frown on borrowing that effectively makes the property 100% mortgaged - when they wouldn't grant that facility themselves.
Unless someone else, like one of the brokers who post on here, can give you a steer I'd go back to source you heard about them from for more info.

taliwillow

Hello,

This is the closest thing I can find to it online.

http://www.inplace.co.uk/shared-ownership.asp

The homebuy part sounds like what I have heard of but they don't offer their services in Oxfordshire it seems. Has anyone else ever heard of this?

Thanks

Taliwillow

Ian_W

I've no personal experience but have seen details of shared ownership schemes - but most seem to be either with a Housing Association where part is owned/part is rented or with a Developer where the builder sells say 75% of the property and retains 25%, which can either be purchased later or is repaid when the house is sold.
There's a search facility at the top of the page try searching the chat forums for shared Ownership.
BoL.

JoeK_3

You could consider applying for a 5% loan now before you move. Have you been checked out by your lender and had the loan approved?

JoeK

taliwillow

We have not had any sort of agreement in principle with our lender as they say that we would have to apply properly for them to tell us for definite if we can have the money but that we can't apply until we have had an offer accepted on a house. We don't really want to be messing people around by making offers that we can't actually afford so don't really know what to do next.