Shared Ownership Novice Questions/Queries

Dcoates93

Hi All,

I/we have recently started looking into purchasing our first home together & have decided that we are interested in initially looking into shared ownership with a local housing trust.

I do however have a few queries (and I am a bit of a worrier/ponderer) so thought I would ask here first - I am terrified of being rejected and all of the associated disappointment/damage to credit rating.

Anyhow, these are my questions:

1. Has anyone used any of the "free" mortgage brokers for a shared ownership application? I am thinking the likes of L&C, etc. They seem to cater for shared ownership but it seems more complicated.

2. Is it possible to get a shared ownership mortgage with a 5% deposit of the share I am buying? I.e the share is 45% & costs £95,000 total. I will have a deposit of £4,750. The value is obviously around £210,000 as a result.

3. How can I confirm an agreement in principle? Is that all I need to make an offer? I have done a few regarding shared ownership but want to be sure - I am going to speak with someone at L&C tomorrow to confirm, before making an offer of any sort.

Basically, I am just looking for some reassurance & for some advice into getting into buying our first home. Neither of us have any real experience in this regard and it seems a complicated mind field to navigate!

Any other advice would be greatly appreciated!

Thanks in advance.

cjv

I am in the process of this at the moment, awaiting completion on the property.

To answer your questions specifically

1. In the end I used a fee free Mortgage Broker, but not L&C or similar. I found a local broker who did not charge a fee, although I would of been happy to pay a fee for good advice. I was offered a broker by the estate agent selling the property who would of charged me a fee, I declined.

My advice is do not get to focused on the fee vs. free, an expensive broker could turn out to be rubbish and a free broker brilliant. Try and search your local area, ask friends and family for recommendations.

2. It is possible with 5%, it depends on the requirements. Mine was 10%.

3. You can get an AIP yourself in a matter of minutes, but it does not really tell you if you can borrow what you need. Make sure you only get an AIP from a lender that does a soft search for now.

I had an AIP from HSBC with no intention of using them for the full application, but in the end I didn't need it. No one ever asked to see it and I made my offer without it.

haras_nosirrah

I am a mortgage broker who specialises in shared ownership and have done for 12 yrs. I am on the panel for a couple of different housing associations and have completed around 2,000 shared ownership cases

With regards to the mortgage you won't find many brokers who won't charge a fee for shared ownership. The mortgage applications are trickier and the mortgage values are lower therefore meaning lower commissions. To give you a guidance we as an independent, whole of market broker charge £399 on receipt of a formal mortgage offer which I believe is pretty middle of the road fee wise

The most important thing is finding a broker who knows the scheme well and is whole of market as especially at 95% there are some smaller lenders who are significantly cheaper than some of the more well known offerings. Whether the property is newbuild or second hand, house or a flat also makes a big difference

London and country are known for a factory line approach rather than hand holding. As they don't charge a fee they have to do a lot of applications so while you can use them for free you may find them slow. Be aware of the housing associations turn around times - some specify exchange within 28 days

I am not saying this to put you off - they work perfectly well for a lot of people but I am saying that if your case is more complex and you want your hand held they may not be the best option for you. By charging a fee we can afford to take on less clients and therefore put the time into each client.