Shared ownership and staircasing up

Sandyra

Hi I wonder if anyone can shed some light, as I had a discussion with my brother about my staircasing calculations and now I think the mortgage broker has got me a offer which has been accepted and going through remortgaging with solicitor and HA but means I need to stump up cash I don't have.

I bought a property last year valued at £277,500 and had a 35% share and also put in a £16,000 deposit. Since then I have had a promotion and my salary has gone up by £6,000 p.a. which meant I was in a better financial situation.

The surveyors valued my property at £315,000 as part of the staircasing process. Ideally I wanted to staircase to 75% which meant I have leave Barclays in favour of nationwide and pay the erc.

I had a lengthy conversation with the L&C broker and he told me it would be doable if I could stump up £5-6,000 cash to cover the difference and fees, which I have got.

I'm now worried that the calculation he did was wrong and come completion they are going to ask me for a lot more cash that I don't have. I guess I am asking for reassurance or clarity.

The other points to note is that Nationwide is loaning me £202,000 and my current outstanding mortgage is £79,000 based on 35%. Is anyone able to figure out what cash I would need to stump up. I was thinking the equity in the property and my deposit is used to cover the difference as 75% off £315,000 is £236,250 and nationwide are only giving me £202k. Please help:(

amnblog

You are buying a further 40% share currently valued at £315,000 x 40% = £126,000.

So you need to pay this figure and replace the £79,000 you currently owe as a minimum = total £205,000.

You need to raise this via mortgage and cash (plus any stamp duty considerations and other costs). The minimum proportion of cash on this total will depend on the mortgage product selected.

I don't do shared ownership anymore and am no longer familiar with the products, but it sounds like Nationwide are lending you 85% of your new 75% share.

£202,000 + £5,000/£6,000 should be in the ball park for £205,000 + costs.

Refer to your broker/solicitor for to the pound calculations.

Sandyra

Oh brilliant that has eased my mind. That makes sense - I can sleep easily.

amnblog

Sleep easily? Are you on night shift?