Shared Ownership assessment failed

nikanika0

Hello,

I've failed financial assessment for SO, I'm a postwoman with permanent 30h/w = £21600, and regular OT - £13000 last year as per p60, being a single applicant this is my only way to buy. My deposit of £16000 is not enough!

They sell min 45% share of £280k house = ca £900 a month (mortgage, rent, charge), this amount should be 45% of net income, so it means 100% net income is £2100 per month, £2800 before tax = £34000 pa.

I save £1000-1500 a month, my broker got me deal counting OT but they don't take it into account.

Who does need SO scheme when earning £34k a year in full time job? Is this scheme for people who earn good money yet don't have big enough deposit to apply for normal mortgage?

AdrianC

Is your overtime guaranteed under your contract? If not, then you may well earn £21,600 next year, not £34,600 - and that's why they're wary.

nikanika0

you're right my OT is not guaranteed, yet is week 18 and I've reached 1/3 of last year pay.
I do these hours to increase deposit and fees, how come they require such a large deposit when 5% is advertised?

AdrianC

nikanika0 wrote: »

you're right my OT is not guaranteed

There y'go, then.

yet is week 18 and I've reached 1/3 of last year pay.

Which is lovely, but overtime may stop next week.

I do these hours to increase deposit and fees, how come they require such a large deposit when 5% is advertised?

The size of the deposit (your cash contribution to the purchase) is down to how much your lender is willing to lend, not the housing association. You've found a lender that'll take your OT into account, but they want a lower loan-to-value, because the percentage of your income which is overtime is so high.

haras_nosirrah

i do shared ownership assessments for a housinf association

we would take 50% of your overtime if you have evidence of it being payable over a 2 year period (so you haven't just started doing a large amount of overtime as you plan on buying)

edgex

Why are you looking at a £280k property?

Even if they were regular earnings of £34600, a 3x mortgage would get you to £104k
Add on your deposit & you could afford a £120k property.

csgohan4

edgex wrote: »

Why are you looking at a £280k property?

Even if they were regular earnings of £34600, a 3x mortgage would get you to £104k
Add on your deposit & you could afford a £120k property.

45% share of the 280k property


Personally SO is a scam and you end up paying much more later. Some are not even able to upscale to 100% due to house prices rising faster than wages

brit1234

Agree shared ownership is a scam designed to inflate prices for builders. Its laughable it is considered affordable house especially with all the extra fees.

nikanika0

it's the only way to get a house, I don't plan to staircase at all, on H2B website they filled all the info ( mortgage calc, rent...) except required earnings! Knowing I needed £34k pa I wouldn't bother with Phase1, but keep saving for Phase2.
I applied for full time nights, will know in 3 weeks, it may help with application later on.

lewishardwick

I have up looking at share to buy when I started getting sent properties with a minimum income of £60k! I know they were in London, but still!

csgohan4

nikanika0 wrote: »

it's the only way to get a house, I don't plan to staircase at all, on H2B website they filled all the info ( mortgage calc, rent...) except required earnings! Knowing I needed £34k pa I wouldn't bother with Phase1, but keep saving for Phase2.
I applied for full time nights, will know in 3 weeks, it may help with application later on.

With SO you are responsible for all 100% repair costs whether you own 40% or 100%. So you will at the mercy of the housing association/ management/developer for large repair bills like roof replacement, renovation.


Is it really worth it especially if you don't plan on staircasing?? What is the obsession with owning a house these days? Is the security worth so much more hassle?


Don't forget if your buying a house/flat you may have a lease, can you afford to extend the lease?


If the reasoning is because is 'it's cheaper than renting' your very mistaken and following the herd in that way of thinking.


Can you absorb a 2.5k new boiler ?