Shared ownership deposit and % questions.

Airlink

Hi my very first post!

My husband passed away last year at the young age of 42. We have 3 grown children. 2 have moved to uni but one remains at home. We have a large 4 bed house that’s getting too much for me to deal with along with the garden and work plus everything else life like to throw at you.

So I need to move. The houses where I live are looking like they are way over what I think I can afford. Unless I want to move to a very rough area or buy something that needs a lot of work, which I’m not able to do, think kitchen, bathroom everything.

I sort of have a buyer lined up for full market value (neighbours daughter, who currently rents). I have found a new build development near to where my family lives but they are very expensive but they do have an option for shared ownership. I have had a brief look and I think I would qualify.

for a 3 bed they are asking for 155,000 which is 50% of the house. I understand i will need to pay rent + charges on top of my mortgage. Now for the questions!

does my current house have to be completed or sstc 

I think I can only get a mortgage for around 120,000 on my wages 23,000 (I do get more around 3,000 as I work some nights/weekends but not sure if they will take that into consideration) this is before tax etc. I work for the NHS if it makes a difference.

can I use the equity from my current home to make up the difference? 

Do I need the deposit 5% in cash or can my equity be used?

When my house sells I would have around 80,000 left after fees.

Do they limit the % you can buy at a time and do you have to wait a certain time period or does this very with each association?

I know when you add the figures a house of 200k sounds a lot but it really isn’t by me unless I buy a one bed flat and kick the adult child out!

oh I have no debt and a good credit score.

Brie

Can't help with some of your questions but, yes, I do believe that the equity from your current home can be used as a deposit.  That was certainly the case when we bought our second home.  The bank considered the price for the house, subtracted the amount of equity we had and the balance (with a bit extra for fees) became the mortgage value. And also your current house sale wouldn't need to be completed but you should have a offer so you know what figures to use.   I assume that would work the same where there is a shared ownership happening.  

Have you asked your bank if you can port your current mortgage?

The company selling the new builds should be able to provide the T&Cs in advance of shared ownership so you are fully informed.  That should include how you can staircase up to full ownership in time.  

Have you discussed this with your children?  It seems a horrible situation to be in and I can understand you wanting to move on but people do this at their own pace.  Not the same thing at all in some ways but when I was quite young my parents sold the family home while I was away and basically didn't tell me until they had to - I left the home I was born in to and came home to someplace completely different not even having a chance to say goodbye to friends.  Your children being adults should make it easier as they are more mature (hopefully!) but they may like to have a conversation about it in advance.  Just a thought.  And sorry for your loss.  42 is much too young.

Airlink

Brie said:

Can't help with some of your questions but, yes, I do believe that the equity from your current home can be used as a deposit.  That was certainly the case when we bought our second home.  The bank considered the price for the house, subtracted the amount of equity we had and the balance (with a bit extra for fees) became the mortgage value. And also your current house sale wouldn't need to be completed but you should have a offer so you know what figures to use.   I assume that would work the same where there is a shared ownership happening.  

Have you asked your bank if you can port your current mortgage?

The company selling the new builds should be able to provide the T&Cs in advance of shared ownership so you are fully informed.  That should include how you can staircase up to full ownership in time.  

Have you discussed this with your children?  It seems a horrible situation to be in and I can understand you wanting to move on but people do this at their own pace.  Not the same thing at all in some ways but when I was quite young my parents sold the family home while I was away and basically didn't tell me until they had to - I left the home I was born in to and came home to someplace completely different not even having a chance to say goodbye to friends.  Your children being adults should make it easier as they are more mature (hopefully!) but they may like to have a conversation about it in advance.  Just a thought.  And sorry for your loss.  42 is much too young.

Thank you so much for your response. I spoke to the children before I even started the process and they all for it, their daddy was very sick over 4 years at home and now he’s not here, they struggle to be in the house and to come and visit me (sadly). They will all be completely involved with the journey. I just need to do some thorough research and make sure it’s the way forward. Plus the house is way to be, the garden is too much for me to handle and it’s just cleaning empty rooms 😂