Co-ownership NI - My Story

HulaNuala

*also posted in a mortgage forum*

Hi all,

During the application process, I searched for a lot of Co-ownership threads before, was unable to find many which are less than a year old. So I thought I would register and post for the first time, in case sharing my experiences are helpful for those making the first steps in applying.

Background: I'm a single professional, and self-employed sole trader. I am the sole applicant for the shared ownership.

Providing my audited accounts and projection was not a problem because I have a great accountant. However, I did only start to gather this paperwork rather late on, which held me back around a fortnight, because HMRC were providing additional information (one of my clients had placed me on a payroll and claimed tax at source for some bizarre reason...). So make sure, if you're self-employed, you have all these documents in advance!

Another important document is your P60, so make sure you can obtain this swiftly, and a credit report. Sign up for the Experian free trial beforehand if you can, as it takes a few days for your postal password to arrive, but also keep in mind that Co-ownership takes over a month. Your report will have expired by the time you go for a mortgage (lenders only take that particular month's into consideration), and they'll need one as well, so you'll probably pay one month's subscription.

You have to have had an offer on a property accepted BEFORE you apply to Co-ownership. Because this can take some time, I would advise being upfront with the estate agent that you intend to use Co-ownership. I was wary about doing this, in case it put off vendors who wanted a super-quick sale, but it's probably the best route. If your vendor has a chain, or if the property is vacant possession, it's less of a concern.

When you send in your application (or drop it in, in person, just beside Jury's Inn off Gt Victoria St), you can pay your £250 fee by cheque/cash or tick the box to say you'll pay by card, and they will phone you closer to your interview, for the payment.

My first hurdle was my income. Proving my self-employed income wasn't an issue, although a part-time PAYE teaching role I hold could not be considered. They said it was temporary, and therefore discounted. I am contracted for a year, and am about to begin my third academic year in the same college, although they said it was an 'uncertain income'. Not as uncertain as some of my business clients, I can tell you...!

Unfortunately there was nothing I could do. I had planned to take an 80/20 majority share, and staircase at the earliest opportunity. Sadly my affordability was downgraded, because they were unable to take into account my additional £800 or so a month, and during my interview, offered me 60/40. I was happy to go ahead.

(Incidentally, the 'interview' is much more like a general meeting to review your application, make any amendments and ask any questions... They're not rating your personality or skills for the application!)

Another factor which affected my affordability was my current debt. I have a balance on a credit card (they will not consider those with debt above £5,000) and am repaying about three times the minimum repayment, to bring the balance down. When they checked my affordability they used my DD amount, rather than the minimum payment, as the application form asks how much you're paying each month, rather than what you have to, to stay afloat. I just had to provide a copy of my statement for this to be corrected, and my affordability score improved. You can tell them during the interview that you're making overpayments, but just detail the minimum payment required on the form.

They pick a time and day for your interview themselves, but when I saw I would be unable to make it, I phoned them and they were extremely accommodating. They brought it forward to the following day, so it sped things up.

Unfortunately, things fell apart at the survey. My property, a 1930s terrace, was suffering from extensive damp and movement in the bay window on the ground floor. Two typically common issues for homes of that age. Co-ownership will not proceed if they think the house is in a continued state of disrepair, or, in my case, the damage is significant. If there are minor cosmetic repairs needed, they will probably still go ahead, but ask you to take care of them yourself (I think within six months).

I had to phone the estate agent yesterday to update them and instead of offering to re-negotiate the sale fee, based on quotes I had for repairs, they promptly emailed confirmation of a fallen sale. They must have known about the damp, the so-and-sos... Despite having sent a DPC certificate through.

Anyway, I haven't given up. Co-ownership have said they will send me a full copy of the survey (or some kind of buyer's version), and refund £210 of the fee. A survey for £40 isn't bad going.

Now back to square one...

Hope this helped someone.

househuntinglady

Thank you so much for posting your experience. This is so useful. Im sorry to hear about the survey letting your purchase down. Hopefully something else will come along! I hope to have an interview with coownership soon. Is it something to be worried about or is there anything I can prepare beforehand?

Thank you!