Shared Ownership - affordability and percentage of share query

Carrera74

My daughter is looking to purchase a house on the shared ownership scheme and after using mortgage calculators and working out finances thought she would be accepted for 50% ownership of a property worth £255K using a £25K deposit.  Unfortunately she has just tried using the finance brokers robot online and it has calculated she is only eligible to purchase 25%.  Are these affordability calculators flexible?  

Her income is £23,407 and outgoings include pension (127), student loan (27) and a car on HP (230) which ends in 12 months.  

I will be moving with her and paying half of everything.  I work full time but have adverse credit so unable to apply jointly unfortunately.

Has anyone experience of being accepted for a higher percentage or are the calculators fixed?

Is 25% a good option? I thought it would be better to own more of the property but potentially it may be easier to sell the 25% if she wants to move in a few years time?

The other option is to rent a house but locally a 3 bed house which we would need is over £800 a month - a lot more than the cost of a new build on a SO scheme hence looking but the 25% share is putting her off.

Any experience or guidance would be appreciated 😊

Snookie12cat

Carrera74 said:

My daughter is looking to purchase a house on the shared ownership scheme and after using mortgage calculators and working out finances thought she would be accepted for 50% ownership of a property worth £255K using a £25K deposit.  Unfortunately she has just tried using the finance brokers robot online and it has calculated she is only eligible to purchase 25%.  Are these affordability calculators flexible?  

Her income is £23,407 and outgoings include pension (127), student loan (27) and a car on HP (230) which ends in 12 months.  

I will be moving with her and paying half of everything.  I work full time but have adverse credit so unable to apply jointly unfortunately.

Has anyone experience of being accepted for a higher percentage or are the calculators fixed?

Is 25% a good option? I thought it would be better to own more of the property but potentially it may be easier to sell the 25% if she wants to move in a few years time?

The other option is to rent a house but locally a 3 bed house which we would need is over £800 a month - a lot more than the cost of a new build on a SO scheme hence looking but the 25% share is putting her off.

Any experience or guidance would be appreciated 😊

From these initial figures I can't see how she would get 50% ownership. Max 5x her income is £120k minus the outgoings listed there and you need to factor in the shared ownership rent as well. 
She should maybe be getting more than a 25% share but have you found a site to buy? 
Best speaking to the site sales team as when my sister bought it wasn't I want this %, it was "you can only buy this percentage, not negotiable". The share was 40%.

The rent and mortgage is very likely to be £800a month though, just to make you aware.

Carrera74

Snookie12cat said:

Carrera74 said:

My daughter is looking to purchase a house on the shared ownership scheme and after using mortgage calculators and working out finances thought she would be accepted for 50% ownership of a property worth £255K using a £25K deposit.  Unfortunately she has just tried using the finance brokers robot online and it has calculated she is only eligible to purchase 25%.  Are these affordability calculators flexible?  

Her income is £23,407 and outgoings include pension (127), student loan (27) and a car on HP (230) which ends in 12 months.  

I will be moving with her and paying half of everything.  I work full time but have adverse credit so unable to apply jointly unfortunately.

Has anyone experience of being accepted for a higher percentage or are the calculators fixed?

Is 25% a good option? I thought it would be better to own more of the property but potentially it may be easier to sell the 25% if she wants to move in a few years time?

The other option is to rent a house but locally a 3 bed house which we would need is over £800 a month - a lot more than the cost of a new build on a SO scheme hence looking but the 25% share is putting her off.

Any experience or guidance would be appreciated 😊

From these initial figures I can't see how she would get 50% ownership. Max 5x her income is £120k minus the outgoings listed there and you need to factor in the shared ownership rent as well. 
She should maybe be getting more than a 25% share but have you found a site to buy? 
Best speaking to the site sales team as when my sister bought it wasn't I want this %, it was "you can only buy this percentage, not negotiable". The share was 40%.

The rent and mortgage is very likely to be £800a month though, just to make you aware.

Thanks for responding.

The calculations were more in line with what we could afford using mortgage calculators / rent on the estate agents site. It's works out approx. 650 including rent and service charge but its their affordability isn't it, not what we can afford 🙈

I hadn't realised the site choose the percentage. The brochure just says between 25-75% but there are 2 different types of  property so will ring them tomorrow to check.

tinytiddles

If the scheme allows it you would be able to buy a 25% share (as long as you meet the affordability checks). Don’t forget with shared ownership you can increase your share at any time so if your daughter increases her income or pays off the car loan and is able to afford a higher mortgage payment later on, she can apply to buy more of the share of the property and could even buy it outright if the finances stack up. 

Carrera74

Looks like it's a minimum 40% share 😔