Shared ownership mortgage.

Marksteeler

Tomorrow me and my partner are going to look at a shared ownership property. I am a bit worried about the mortgage though. I have checked my credit history and mine is poor my partners is fair. One of the things bought up on mine was that I'm not on electrol roll. I do have a letter to prove that I am, experian say it can take 3 months to be added. If that is added will I be likely upgraded to fair? Me and my partner have been debt free for 12 months now. My partner has a car on fianc! and keeps up with payments. We would like a 95 percent mortgage. Do people think this will be likely? We have a household income of 28k a year too.

lindsaygalaxy

My partner has very good credit and I have poor due to BR 5 years ago. We spoke to broker re shared ownership and she said it would be possible with 10%, not 5%. She also said the criteria was harder for a SO mortgage!

Marksteeler

Thanks for your reply. I could stretch to 10 percent deposit but was hoping to hold that back for any fees that may come along and obviously the removals.

Marksteeler

Forgot to mention that we are after a 34k mortgage. We've done a financial statement and with everything except mortgage payment included we have 750 a month left.

chanz4

3400 deposit, most like 20% on new build

kingstreet

There are a couple of lenders who do 95% on shared ownership newbuild. I did one myself on Monday.

Caladan

kingstreet,
Out of interest and professional curiosity, do lenders treat shared ownership for new-builds the same way as standard Mortgages for new-builds?

I ask because I presume the lender still takes a charge over the entire property and therefore the re-sell value is based on the property as a whole rather than just the customers share, meaning the fact it's new-build is almost irrelevant.

kingstreet

Only the share being purchased is charged by the lender, so they act as if the other portion doesn't exist. There's a mortgage protection clause which allows the lender to purchase the unowned share if the property is repossessed, to enable the lender to sell the property in its entirety.

Most lenders, take Nationwide for example, will only lend 85% on a newbuild house. If it's shared ownership it remains at a maximum of 85%. Others only lend 80% on a newbuild, but will go to 95% on a shared ownership newbuild. No idea why they would do that, but I'm glad they do as I do a lot of work for a housing trust here in the Midlands and it's mostly 95% SO.