Shared Ownership deposit query

Britannia1863

Hi Everybody

I'm new here!

I'm currently in a shared ownership property which was valued at 110k at the time of purchase, my mortgage is for 50% of the property.
I'm wanting to purchase the remaining 50% of the property, Which is now worth 120k.
I was wondering if anybody knew how much deposit I would need to purchase the other half?
I had to put 5% of the 55,000 when I first signed up. I have approx 12 years left on my mortgage as it stands if thats any help.

Thanks in advance

Britannia1863

Also i've checked my HA paperwork and I can buy 100% of the property unlike some other shared ownership properties.

Paul_the_Painter

You may not have to put any more cash in for the deposit. If you work backward, the value of the property is £120,000. You originally borrowed £52,250. If you assume that with 12 years left to run your outstanding mortgage is about £34,000, and you need to borrow and additional £60,000 to buy out the HA. You need total borrowing of about £94,000.
That gives you essentially a 20% deposit. (120,000 vs 94,000) you'll need a few hundred pounds for legal fees, but you shouldn't need a big chunk of deposit.

Britannia1863

I'm pretty sure I owed 44k about 6 months or so ago. I can't seem to find the relevant paperwork at the moment.

kingstreet

Your lender will have a maximum loan to value it will permit for shared ownership staircasing. You need to ask them what it is.

If, for example, it's 90%, you'll need to have equity of 10% of the full value of the property.

Paul_the_Painter

Even at 44k outstanding you'll have access to deals at a 90% LTV ratio.
You need to only need to borrow 90% of the value (so £120,000 x 90% = £108,000) the HA want £60,000, outstanding mortgage £44,000
Total borrowing required £104,000, below the 90% threshold.
Of course if you have extra money it does make sense to borrow as little as possible, but I don't think you'll have a problem doing the deal even with 44k outstanding.
I assumed a 25 yr mortgage with 13yrs gone and 12yrs remaining, but you may have borrowed over a different term.

Britannia1863

That's definitely encouraging news, Thanks Paul :-)
I think I did originally have a 30 year term, but honestly can't remember. Hopefully I can soon fully own the property I'm in and then no longer have to pay half rent and half mortgage. Unfortunately I will still have to pay the rip off service charge each month!

Thanks for your help.