Staircasing - buying additional shares

bailey_kc

Need a bit of advise regarding staircasing. We own 25% of our flat outright and we would like to purchase the remaining 75% share, which costs £161,250. What we're confused about is, do we need to come up with a 10% down payment for the 75% we're buying. We only have 5% of that amount.


The other thing is, doesn't the equity we already own come into it?


Any advice appreciated.

kingstreet

You will need equity of whatever your lender requires at the end of the transaction.

If your lender will allow you be at 90% after staircasing, it seems the value of the property is £215,000 so you could have a mortgage of £192,500 and your equity would then need to be £21,500.

This could be made up of the equity you currently have, or a combination of this, plus savings, to bring it up to the minimum.

Loopy28

bailey_kc wrote: »

Need a bit of advise regarding staircasing. We own 25% of our flat outright and we would like to purchase the remaining 75% share, which costs £161,250. What we're confused about is, do we need to come up with a 10% down payment for the 75% we're buying. We only have 5% of that amount.


The other thing is, doesn't the equity we already own come into it?


Any advice appreciated.

What was the cost of your 25% in comparison to the current value? The equity will be taken in to account when calculating the LTV. If you already own 25% then technically if you are buying the remainder then you will have 75% LTV at the very maximum so wouldn't necessarily need to put any further deposit down unless you want to.

bailey_kc

Thanks so much.