Shared Ownership Question?

Skintbuthappy_2

Hi everyone

I brought my house on a 50% shared ownership scheme 4 years ago!

I currently have a mortgage of £48k and my 50% share has been recently valued at £100k!

I would like to borrow some money from my mortgage company to update my kitchen and bathroom but i was recently told by a friend that on shared ownership schemes you are only aloud to borrow against the house if you are doing it to up your ownership percentage or to buy out the other 50% completely....

Does anyone know if this is true or has anyone else have any experience of borrowing against a shared ownership property??

Any help would be greatly received!!!!

christabell

Why don't you check with the the Housing Association or whoever you have the rental agreement with? Plus check with your mortgage lender if you can remortage? Better to get the FACTS instead of believing a friend who may not really know???

Liz33

Hi

If your 50% share is now worth 100k then you are able to increase your mortgage up to this amount or any amount in between, should you so wish.

Your mortgage company would write to the housing association advising how much in total you now want to borrow (existing mortgage + new borrowings) and they need to provide a copy of the valuation to show the worth. The housing association may make you pay for one of these with them.

But providing you are not borrowing more than your share is worth this should all be fine to do.

Zelie

Hi,

I don't know the specifics but wouldn't your mortgage company know the rules better than your friend? He may be right but I can't see a way that it would hurt if you gave them a call and made enquiries. They might want to back improvements to the property but even if they say no then at least you'll know and can look at other loan options.

Liz33

Oh I forgot to say I work for a Housing Association and these are the rules in mine but I would imagine most will work on similar rules

Mr_helpful

I have tried this before as a remortgage and only been allowed a pound for pound swap. I think it is very unlikely but as other posters have said ask your existing lender.

hollyblue

Hi

I too have a shared ownership property and have released equity in my share (twice!), once to buy a car and second to consolidate debts.

My current mortgage lender said they could not increase my mortgage but on both occasions gave me a home owner loan secured against my share of the property - not sure if they spoke with my housing assosication or not.

HOWEVER, BEWARE if you wish to change lender at a later date you may experience some difficulty, in that in order to obtain a mortgage with another lender they may not be happy to give you a mortgage which incorporates a secured loan which was not taken out to increase your share in the property. I have recently experienced this myself although I have found one lender who is prepared to do this.

Best of luck