Shared Ownership - can I choose my own lender?

WorkHardPlayWell

Hi,


I have applied for a shared ownership property; the housing association owning the share, recommends I use their recommended independent financial adviser (IFA); they recommend this to anyone applying. The thing is that I am having to wait for days to even get an appointment with the IFA and I feel time is of the essence. Meanwhile, I still have an agreement in principle from 1 month ago that I got while trying to buy an earlier property (didn't work out in end because I got outbid) and the lender has told me that they can get it processed in 4 weeks or less.


If I were to go with the lender directly and skip the IFA, would the housing association penalise me for this,or withdraw the acceptance of my offer or something?


Thanks for any advice,

kingstreet

Will the lender you chose originally lend on shared ownership?

As an example, NatWest doesn't lend on shared ownership.

Will the lender you chose originally offer the loan to value you need, if for example it's a newbuild?

If it is, Halifax will lend no more than 80%, for example.

SO is a specialist area, with limited lender options. I would wait for the broker so you don't end up spending money only to find out the lender won't lend after all.

WorkHardPlayWell

kingstreet wrote: »

Will the lender you chose originally lend on shared ownership?

As an example, NatWest doesn't lend on shared ownership.

Will the lender you chose originally offer the loan to value you need, if for example it's a newbuild?

If it is, Halifax will lend no more than 80%, for example.

SO is a specialist area, with limited lender options. I would wait for the broker so you don't end up spending money only to find out the lender won't lend after all.

The lender told me they done lots of SO in the past and I asked if there would be difference in treatment compared to outright and they said I can still borrow same amount as if it was an outright purchase. They were happy with my deposit and clean credit record.

kingstreet

Is there no rent or service charge on the share you aren't purchasing, as if there is, that would definitely impact on your borrowing power?

WorkHardPlayWell

Quite right;
There are rent and service charges, but went over that with the lender and it was taken into account.

kingstreet

Normally, the rent and service charges are deducted from affordability, which means you'd be able to borrow less on a SO purchase than on a standard purchase without such costs.

Is it a newbuild you are purchasing and which lender are we talking about?

WorkHardPlayWell

No worries; got the offer; took them under 10 days. Thanks for the advice, anyway.

kingstreet

You provided no lender details, so no way of knowing if you got the best deal, a good deal or just a quick deal...

I'm positive you made sure you saw to that.

amnblog

For anyone else viewing this thread.


The OP got lucky here.


Going your own way on a shared ownership case is not recommended.

WorkHardPlayWell

Nationwide.
Don't think it was just luck; did a lot of homework and preparation for this. It helps to get approved quick if the building is easy to survey (new, uncomplicated), you have a good credit record, you're not borrowing much, you have a solid deposit, etc. basically anything that makes you "safe" to lend to. AND chase them; do what you can to make their jobs easier.

Don't get me wrong, if I had some complicated circumstances / situation, I would go with a broker to help me out.

amnblog wrote: »

For anyone else viewing this thread.


The OP got lucky here.


Going your own way on a shared ownership case is not recommended.

kingstreet

Nationwide maximum loan to value on a newbuild house is 85%, 75% on a newbuild flat, shared ownership or not.

Many SO purchasers come along with no deposit, or as little as 5% where Nationwide won't be interested on such a newbuild case.

It is essential for every purchaser to ensure their case meets their lender's criteria. Seeing one person successful with a particular lender doesn't mean everyone can stroll along to that lender and be accepted.

WHPW - well done, like I said you obviously ensured the lender was suitable for your particular case and you were getting the best deal open to you.