Staircasing shared ownership to 100%

lisastevo

Hi all.

I’m hoping someone can help me understand the staircasing process. 

Full purchase price was £210,000 in 2011.
Our 40% share was £84,000. Original mortgage was for £74,000

We now have £53,000 remaining on the mortgage.

The house is currently valued around £340,000 making our share worth £136,000 with the remaining 60% at £204,000.

How does this work? We get a mortgage for the 60%, use equity? Do we pay off the existing mortgage? 

Please excuse my stupidness, I just don’t understand how this works. I’m waiting on a mortgage advisor to call me back but thought I would ask here first.

Thanks in advance

biscan25

Have you checked the lease allows staircasing to 100% and grants the freehold?

lisastevo

biscan25 said:

Have you checked the lease allows staircasing to 100% and grants the freehold?

Checked the lease, we can staircase to 100% then we are granted the freehold. Some other houses on the development have already been through the process in the past but I did double check our lease to be sure.

eddddy

For mortgage purposes, based on what you say, your situation will look like this..

• After staircasing you will own a freehold house

• Your freehold house will be worth £340k

• (Any mortgage lender will want to do their own valuation of the house - they may say it's worth £340k, or £325K or £310k or whatever.)

• There are 90% mortgages, 80% mortgages, 70% mortgages etc, etc available.

• If, for example, you went for an 80% mortgage and the mortgage lender valued the house at £340k - they might lend you up to £272k (i.e. 80% of £340k)

• But the mortgage lender would check your income and outgoings, and would only lend you £272k if they felt you could afford the repayments - let's assume you can afford those repayments.

• So you want a mortgage of £272k. You either pay off your existing £53k mortgage, and take out a new mortgage for £272k - or, if your current mortgage is portable, you increase your current mortgage by an extra £219k to make £272k in total.

Essentially, it depends how much savings you have to put towards the staircasing. If you have a good chunk of savings, maybe you only need a 70% mortgage ( = £238k loan) or a 65% mortgage ( = £221k loan).

fletcher1985

when i got my 50% when i remotaged and wa given a bigger mortage i got another 20% of the house and then the net time i remortaged i did another 30%