Shared Ownership as a single applicant

OnlineAlex

Hello,
Following a recent thread, I posted, my first on the website, I had great information from really helpful people. Big thanks to everyone on my OP.

On reflection I think shared ownership might be the right path for me to go down as I really don’t think I’m going to be able to mortgage an entire property due to my income. There is scope for me to progress in my current job, which I am hopeful will be the case in the future, however, due to cuts in Education this is going to be a longer process than I would like.

My questions are as follows:
• Is getting a shared ownership property more difficult as a single applicant?
• Is getting a mortgage on shared ownership property more difficult?
• Do you have to use mortgage providers who specifically deal in shared ownership mortgages?
• Once you have a property, can this be sublet. For example, could I take on a lodger in a spare room?

Also, I think I may have shot myself in the foot somewhat. I’ve had to take a personal loan out to the tune of £202 a month in order to buy myself a new car. I didn’t really have any choice as I’m having to commute over an hour to work.

My current take home is: £16.5k a year

Only out going is: £202 for my loan

Current savings: £7000 (£3000 in HTB ISA)

Example property: 40% share of £180,000 property at £72,000

Thank you,

Alex

wordsearch

OnlineAlex wrote: »

• Is getting a shared ownership property more difficult as a single applicant?
• Is getting a mortgage on shared ownership property more difficult?
• Do you have to use mortgage providers who specifically deal in shared ownership mortgages?
• Once you have a property, can this be sublet. For example, could I take on a lodger in a spare room?

1. I didn't find it any more difficult. I don't really have anything to compare it to, myself and five friends own shared ownership properties and we all own them as individuals.
2. As long as you can afford it I don't see it making a difference.
3. Yes.
4. Generally, depends on what your contract says.

Kidder81

Sorry, I can't answer any questions regarding SO as I have no experience.

You have though certainly done yourself no favours with the car loan. £202 per month is a massive out going onbyur salary. What is your take home pay? I'm guessing the car money takes up 15% ish of it. Absolute madness when every penny counts.

The most reliable car I have ever owned was a £1300 15 year old BMW.

haras_nosirrah

I am a mortgage broker who is recommended by a housing association and does their affordability assessments

essentially the mortgage, rent, service charge and your loan can't be more than 45% of your net income to fit affordability. We use an interest rate of 5% on the mortgage when looking at affordability even though the mortgage will be lower to allow for potential rate increases.

that loan on your salary is a big commitments. is there any room to clear it even if it means reducing your deposit to 5% of the share? You will need about 2k on top on the min 5% deposit to cover your buying costs.

to answer your questions

if you pass affordability it doesn't make much difference if you are single or a couple but if you are competing against a couple for the same property they would get it as they come higher up the priority list (2 people instead of 1)

you can get a lodger but any income cannot be used for affordability purposes and you cannot move out and leave the lodger there. It has to be an informal agreement.

only certain lenders do shared ownership.

OnlineAlex

Thank you for your feedback. Unfortunately I couldn't link my original post to this one to give more information on my current circumstances. My ex partner has just ended our 5 year relationship 3 days after we were presented with our mortgage agreement in principle from Halifax (we had temporarily moved in with his parents to save).

This left me having to suddenly move over an hour away from where I work and my amazing friends, with no car or means to commute. Whilst I am aware that taking out such a big loan would seem like 'absolute madness', I didn't really know what to do. I didn't even consider that I might be able to afford a property by myself in any capacity. Obviously I'm now beginning to regret the loan but I'm not really sure what I can do about it. Hopefully if I save long enough I'll be able to sort something out.

Thank you to those who provided tactful and helpful replies.
Alex

haras_nosirrah

just a question - you say your take home is 16.5k. do you mean your net income or is that your gross salary? That obviously makes a massive difference to the affordability

I have the calculator for the housing associations if you want to send me any figures by pm and have a property in mind

OnlineAlex

just a question - you say your take home is 16.5k. do you mean your net income or is that your gross salary? That obviously makes a massive difference to the affordability

I have the calculator for the housing associations if you want to send me any figures by pm and have a property in mind

It's £16,475 before tax.

My monthly take home is £1136 after tax, NI and pension.

Thank you for being so helpful.

Alex

BorisThomson

How much would the rent and any service charge be?

Lunchbox

A shared ownership property at this price and share percentage will cost £700-£800 a month, including mortgage payments, service charge and rent. With the car repayments, council tax and utility bills on top, you're well over your take home. I'm sorry to say it doesn't look at all realistic on that salary, even without the car repayments.

streetlovin

I have recently bought a property on shared ownership as a single applicant. Hopefully some of my answers will be helpful I am no expert though.

• Is getting a shared ownership property more difficult as a single applicant?

No, I didn't feel that it is more difficult. I still had to go through affordability assessment with the Housing Association and the lender. They will take into account of your mortgage, service charge, rent and all other costs that you have to continue paying. Mortgage amount may be little but service charge is really high so that can affect your affordability. Luckily, I bought an apartment with no communual area or garden so my service charge is only £12 a month. I suggest you take a look at this with the housing association and do some affordability test to see if it exceeds 45% of your income. Lenders will normally lend up to 3-4 times your salary. With your current salary and existing loan, you may need more deposit and most likely higher salary. I seriously think paying of the personal loan before you start your mortgage will be the best thing to do though. My car loan is only £88 a month and that affected my affordability hugely.

• Is getting a mortgage on shared ownership property more difficult?

No, I think it is all about meeting the lending criteria. I suggest you speak to a mortgage advisor. Most lenders have lending criterias published on their website, you can take a look and see which one will most likely consider you. At least that's what I did

• Do you have to use mortgage providers who specifically deal in shared ownership mortgages?

Yes. If you get a good mortgage advisor that look at the whole market they should be able to find you the best deals.

• Once you have a property, can this be sublet. For example, could I take on a lodger in a spare room?

It depends entirely on the contract. Most likely they will not allow you to sublet. You don't own the whole property, only % of it. The rest is still owned by the Housing Association/whoever you pay the rent to.

Slithery

• Once you have a property, can this be sublet. For example, could I take on a lodger in a spare room?

It depends entirely on the contract. Most likely they will not allow you to sublet. You don't own the whole property, only % of it. The rest is still owned by the Housing Association/whoever you pay the rent to.

Taking on a lodger isn't subletting.

Subletting is when you move out and let the entire property to someone else.