Calculate equity on existing shared ownership?

cozlw

Hi all,

I'm planning to staircase on my current shared ownership property where I already own a 50% share.

I'm trying to calculate the equity in the property but different providers are providing different calculations!

Any advice. For example:

In 2009 the property was valued at 200,000 and I purchased 50% at 95% ltv with Halifax.

I'm now remortgaging to 100% ownership - how do I calculate my existing equity? I'd like to source my own online remortgage deal as it's now open market as I'll own 100%.

Thanks in advance!

dimbo61

Well you need to find the current value of the property.
You need to find out how much the outstanding balance is on the mortgage you already have.
You will need to find out how much it will cost to buy the other 50% and any other costs, legals, stamp duty, survey, searches , management charges etc
Do you have any savings to pump into the property to help with the LTV or other costs ?

rtho782

You don't say where you are in the UK, so I can't be specific, but, UK wide, house prices have gone up 32.63% since Q1 2009 according to the Nationwide House Price Index.

This means the house is now worth £265,267 (this is a "reasonable guess, get a valuation to be sure) and you own half of it, so ~£132,600.

If you got a 95% mortgage, your mortgage was for £95k. If I assume you have a 25 year mortgage, at 3% APR, and have been paying for 7 years, you owe about £75,115 now. (ask your mortgage company how much is outstanding for an accurate figure).

If these assumptions are all accurate, you have £57,485 equity. If you purchase the rest of the house, it would be at it's value today, so you'd have to pay £132,600 ish for it. So you will need a new mortgage for ~£190k, on a property of £265k, giving you a ~71% LTV.

This is all very rough as I've gone on so many assumptions. Your area might not have gained near as much in terms of value, or might have gained more.

Oh, and bear in mind, if it's shared ownership, it's probably leasehold, and you will still have to pay a service charge.

Ktaylor86

rtho782 wrote: »

Oh, and bear in mind, if it's shared ownership, it's probably leasehold, and you will still have to pay a service charge.

Not necessarily, I am currently staircasing to 100% on a semi-detached house and as part of that it will not longer be leasehold, when buying the whole property it becomes freehold. I expect this would be different if it was a flat.