Shared Ownership - Staircasing

kevinmcc

So I went into Halifax to find out about staircasing my Shared ownership mortgage. I have a 40% share of a property valued at 120K. When I took it out last year I put down a 10% deposit on my share. Now they are telling me that they want a 20% deposit on the overall value i.e. 24K, in order to staircase the remainder.

Have I any other options as I don't have a 24K deposit? Am I able to remortgage with another bank, I notice some banks offer a 95% LTV for remortgages, would that apply to me?

kingstreet

It's a bit awkward this, as it's not really a remortgage and it's not really a purchase, although additional equity is being purchased.

I suggest you speak to a broker. My colleague has a case like this on the go at the moment and he's had trouble both explaining to a lender what he's trying to do and finding one to accept it.

Ours is complicated because the value has dropped, so the borrower is in negative equity on his share and will purchase the non-owned part cheaper as a result. He is having to put in extra money to do this.

You could be up and down the high street for weeks with this and still get nowhere.

piratesu

It is an awkward one because not all lenders off loans for these sorts of properties. Would agree with the other responder that a broker would be the way to go as they tend to know the market. Local estate agents will usually have one at their offices, but worth getting a recommendation from local friends if you can.

brit1234

Have you considered over paying the mortgage part instead. If the sums add up it may work out better than staircasing and make it easier to staircase in the future.

kellyt86

Surely the equity you have built up will count toward deposit?
I am interested as I am purchasing a 50% share of a house and will look to staircase to 100% in a few years.

In the interim I am planning on making overpayments to build up the equity.

Maybe if the equity can count towards the buy of other share OP you should hold off a year or so and make as many overpayments as possible?

Just out of interest what kind of deal are you on OP? Fixed? And were Halifax willing to lend you the extra provided you could have a total of 20% deposit on the same deal you are currently on! Thanks!

kingstreet

Overpaying is a good idea, but it will not reduce the rent you pay on the unowned share. it will reduce the mortgage term or the mortgage interest, depending on what you want your lender to do with your overpayments. You need to carefully compare the difference to see which is most suitable for you.