10% Share of Shared Ownership

flossie13542

I’m looking at purchasing a shared ownership flat at a 10% share (fully aware of the pros and cons). Has anyone successfully secured a mortgage on a 10% share with a 10% deposit. This is marketed by the housing association, but in initial conversations with a mortgage broker it sounds like it would be difficult to get a mortgage?

any experience that you can share would be really appreciated!

MasterG83

Hi, I purchased mine many years at 25%, is the developer offering 10% shares through a particular lender?

flossie13542

Hi, no they haven’t specified a lender but have suggested I go through the mortgage broker that completed the financial assessment.

BungalowBel

!0% deposit on a 10% share? Didn't know such a thing was possible!

The again I know next to nothing about shared ownership, so take no notice of anything I say!

Myci85

We came across similar issues when we previously looked at shared ownership properties. Our joint income wasn't enough at the time for the bigger shares as my partner wasn't in secure employment, and whilst theoretically we could have bought a 10% share on just my income, we then found no lenders would lend such a small amount. It seemed infuriating that something specifically set up to help people buy on lower income, was actually then not possible. I don't know if others may have found a way round the issue, or if most people pay the 10% in cash.

flossie13542

Thanks, I’m in a similar boat with a solo income, did you go via a broker by the way? Seems odd and certainly a waste of time to market and do financial assessments for something that isn’t actually viable

Myci85

Yes we did use a broker, albeit we eventually managed to buy a property at full market value as my partner's job situation improved.

I'm not sure how many brokers deal with shared ownership, or how many lenders tbh. And I found the process hard to understand when we were looking at S/O, as it seemed the housing association had to be happy you met their criteria, then direct you to a company who vetted you for affordability and you had to pass their checks first, then sort a mortgage, it just seemed so many different people to deal with and no clear advice on what the process should look like overall.

whizzywoo

My brother purchased 30% of a Shared Ownership house just over 2 years ago. After passing all the affordability checks etc with the Housing Association he managed to get a 7 year mortgage from Newcastle Building Society for just under 10% of the of the 30% share.

The cost of the house was £245,000, his 30% was £73,500 and he got a mortgage for £67,250. The 7 year mortgage took him to retirement age. His mortgage broker was London and Country Mortgages.

https://forums.moneysavingexpert.com/discussion/comment/81945242#Comment_81945242

flossie13542

https://forums.moneysavingexpert.com/discussion/comment/81946658#Comment_81946658

thanks, and congratulations on being able to eventually buy. I’ve managed to find a broker who has been able to get a decision in principle from a specialist lender, fingers crossed it all goes through!

KAW881519

Hi, can I please ask which broker found you a deal and with which lender? I'm having the exact same issue, I can only afford a 15% share and have a 5% deposit of that share (developer is allowing shares down to 10% and only asking for 5% deposits), but so far everyone says lenders want at least a 25% share.

It seems silly it's this difficult when the new homes model specifically allows 10% shares