Shared Onwership Mortgage

Paul1211

Hi

Can anyone here recommend any mortgage broker that has experience working with shared ownership lenders?

I am looking at a shared ownership property with a share totalling £83,000, however the company I have been guided to have only given me a mortgage for £43,000 which is absolutely ridiculous. I am on a salary of 24k + with no loans or debt at all, but they are saying a service charge of £100 a month is whats bringing my mortage allowance down?

Just wondering if anyone has any advice on how to work around this best?

Thanks

throwaway_lon

SO mortgages are based on your salary after outgoings. I'm in the same situation as you, no debts or loans, and I can only get a SO mortgage for about 60% of what I can get with a traditional mortgage. This is because it's worked out at your salary minus outgoings for the service charge and rent. e.g. 2k monthly salary -100 in a service charge and -300 in rent on the % you don't own. So your mortgage will be based on if you were only earning £1600 monthly.



It seems unfair, but it's actually better for you in the long-term, because if interest rates rose and/or prices fell, then you wouldn't be able to afford your mortgage and rent and would be forced to sell (and likely at a loss).

Paul1211

I have applied for a:

2 bed house, total value of share was £107,000 - I was told I could have a 73,000 mortgage
1 bed flat, total value of share was £83,000 - I was told I could have a mortgage for 43,000 mortgage

The bizzare thing is, the rent + service charge on the house was £67 more than the charge and rent on the flat, yet the mortgage application was lower due to the service charge in the flat being £50 more than the house.

Ridiculous, I thought these schemes are meant to make for affordable housing

Cakeguts

Why is there a service charge on the house? Normally in shared ownership you own a percentage of the property but are 100% liable for the repairs.

haras_nosirrah

I am a shared ownership mortgage specialist with 10 yrs on the panel of 2 housing associations.

Different shared ownership lenders lend different amounts but the rent and service charge will be taken off the income compared to a traditional mortgage without these expenses. I had a client I have just placed on Friday where one lender leant enough to buy a 45% share whereas the others would only lend enough for them to buy 30%.

Paul1211

Thanks for the replies

Is there anyway at all possible you can get this mortgage lender to me via message?!

csgohan4

Paul1211 wrote: »

Thanks for the replies

Is there anyway at all possible you can get this mortgage lender to me via message?!

Nothing stopping you messaging them on here, I got my broker on this forum.


But personally wouldn't touch SO with barge pole, so many problems can arise.

haras_nosirrah

Hi Paul.

As csgohan4 says the brokers on this forum cannot pm or approach you but we can respond to pm requests if people want our help.

We also cannot name lenders on the forum or it can be considered advice.

JM86

Hello all,

I have been looking into this scheme for over ten years. I am self employed live alone because I want to in my forties with valid expenses but realise I cannot get onto this scheme without putting all my earnings through despite for example working from home 1 to 2 days a week, investing in my creative work that I do, transport costs etc I work all the time because my rent is so high in London. I do two returns one for my secretarial work and one for my music which I do myself because I am well versed in bookkeeping.

My question is what are people’s experiences of this scheme. Is it worth paying a huge amount of tax to get on it? Is it really cheaper than rent?

My main employer is 77 and has already had a stroke. My thoughts are that it must be in the long term worth doing rather than paying £1430 a month and I should do it now whilst I am earning (the most I ever have) but I have heard it is also difficult to get out of it if you want to.

For example I am not interested in staircasing. Owning more of the share makes it much harder. I also know some of the companies are a bit dodgy hence why one should do it through shared ownership reputable housing associations such as Peabody but even if it was one of these other companies has anyone had experience of ones such as Notting Hill Genesis. In order to do it though I would be using up half the savings I have just to pay the tax.

Any advice would be greatly received. Thank you so much.