Can you buy into a shared ownership without a mortgage?

Emkayoli

as the title really if you have the funds available can you just outright buy say a 25% share of a shared ownership property without seeking a mortgage?

I ask because with some saving that may eventually be a route to home ownership as I have a health condition now that means I may no longer be able to manage working full time in the job I was studying for

But I would still like to own a house and hopefully staircase up with savings if I am unable to source a mortgage.

da_rule

My understanding is that shared ownership is part buy and part rent. Where the money comes from to buy your share shouldn't really be relevant. In fact the party who you enter into the agreement with (Housing Association etc) may bite your hand off as you will own a good chunk of the property without a mortgage lender having an interest should they ever need to take action for non payment of rent. Also no mortgage payments mean you are more likely to be able to keep up to date with the rent payment.

I stand to be corrected.

Elfbert

I'm not certain, but I think it would go in your favour considerably.

I live in a shared ownership flat, and I had to put in a 12% deposit because they do a calculation based on your earnings/the value of the part you're buying/the rent you pay on the rest. So I would think, providing your earnings were more than enough to cover the 'rent' part, they would be very happy to sell to you!!

Best thing to do is phone the housing association concerned and ask, they should easily be able to help you over the phone

Good luck.

Emkayoli

Thanks I will do on Monday and register us, there is nothing on the market we are interested in at the moment but if the option is there then it's a way for us to get on the ladder in an appropriate house for my potential needs!

Elfbert

Good luck

I know some people are really down on Shared Ownership, but for my partner and I it's been fantastic. We're managing to save up loads of money for a deposit on somewhere which will be 100% ours, because living here is much cheaper than paying rent in the same area.

However, we couldn't afford to buy something outright when we needed to move (for work), as at the time my partner had poor credit.

We're aware it may take us longer to sell than a 'normal' property, but as we are well aware of that we can work with it. We love our flat, and love that it works for us

Best of luck to you finding somewhere.

egoode

Would it not be better that you buy a larger percentage initially and get a mortgage so that you are at least paying less towards the rent portion over time. I think it would be worth finding out what the difference would be in the monthly payments if you got a mortgage and a larger percentage ownership initially.

gaz141

I know when I started the process of buying mine, my HA (Notting Hill) looked at my finances and offered me a property on the percentage they thought I ought to buy / could afford. I'm sure all the HA's work differently with different criteria, but I don't think mine would have allowed me to buy a lower share than what they had in mind.

Elfbert

gaz141 wrote: »

I know when I started the process of buying mine, my HA (Notting Hill) looked at my finances and offered me a property on the percentage they thought I ought to buy / could afford. I'm sure all the HA's work differently with different criteria, but I don't think mine would have allowed me to buy a lower share than what they had in mind.

Good point. Mine was a re-sale, so I had to buy the 40% the guy before me owned, or more!