Home buying advice please...

darren_5

Hi guys,

We have been given a mortgage in principle for upto £174,000. Now realistically we are going to be looking around the 120-130k mark to keep the monthly payments down. However, we don't seem to be getting a lot of good 3 bedroom houses for this price.

So, i don't know a lot about shared equity, but would we get more of a house if we looked at some of the developments being built in our local area?

I'm not sure how they work so any advice would be most appreciated, i know some people love them, others hate them. But where as 130k we would be looking around £600 for a mortgage, could we get a better purchase value for around the same £600 if we looked at shared equity.

Any advice would be much appreciated. Please be polite.

Darren

becominganobsessivesaver

I don't know a lot about shared equity, but by the time you've paid 'rent' on the other portion and taken into account your mortgage options will be more limited you may be better off trying to own a house outright.

How much of a deposit do you have? What is your income and where are you currently living? Could you maybe keep saving for another 6-12 months in which time a suitable house may come up and you will have more of a buffer?

darren_5

We have 16k deposit, looking at 3 bed area in Caerphilly Wales.

We did view a property we quite like but it states offer in excess of £135,000 so we don't think they will budge much. For what it is we would hope for 125-130.

Joint income of 39k

becominganobsessivesaver

We were up for offers over £110k and took 105 so you may be lucky. What did they pay for it? Maybe give 127 a try, and if they say no just walk away.

motherofstudents

If you do an advanced search on here, you will find plenty of threads on shared equity and I think you will not find many favourable comments about it. All I can suggest is you do your homework, check sold prices and make sure you know what a house is worth before you make a (lower) offer.

Carl31

if you rent, you have no maintenance costs, no property risk and no worries, unless you have a shoddy LL, but all money is sunk cost

If you own, you have none of that, but you have the asset value in your pocket, offset by the interest paid and maintenance cost

in shared equity, you have increased sunk cost, as you pay interest and rent, with no benefits of renting, and only part of the benefit of owning, as you own a bit of a house that you have to fully maintain, even though you dont own all of it

make of that what you will

DominicJ_2

Shared equity is great for everyone except the purchaser.

http://www.rightmove.co.uk/property-for-sale/property-33303452.html
http://www.rightmove.co.uk/property-for-sale/property-33808327.html

kingstreet

You don't pay rent on a shared equity property.

You purchase all the property with a deposit, mortgage and a second charge loan which supplements your deposit. This is normally interest-free for five years, repayable on sale or at the end of the term. After five years, interest ia payable and is based on RPI+ which increases each year.

When repaid, the loan is based on a percentage of the sale price from what it was at the outset. So if you borrow 15%, you repay 15% when you sell, whether higher or lower.

Shared ownership you buy and sell only a portion of the property and pay rent to the third party, normally a Housing Association.