URGENT: Shared Ownership

chump

I'm going to view a property tomorrow which is owned by a housing association.

The property is £140,000.

I will be taking a share of 25% @ £35,000. I then pay subsidised rent on the remaining share.

I will have to take out a mortgage for £35000.

Do you have to put a deposit down on Shared Ownership properties and if you down is it on the total price of the property or just your share you have a mortgage on?

Thanks
Marc

Robert_Sterling_3

Ask the housing association if they will require a deposit and if so how much.

Fairdo_2

Chump

Sorry for the delay.

Couldn't access my account as I needed my passwords again, so I hope I am not too late.

You generally need to show a minimum commitment of 5% of the percentage share. In your case for £35,000 shared ownership you would need to stump up £1,750 as a deposit. Along with this, you would be expected to pay for a Homebuyers Report (Scheme 2 survey and more expensive than the basic mortgage valuation).

A few lenders would allow you to borrow 100% of the share, but you would be limited to the Standard Variable Rate as far as I understand at the moment.

I could be wrong on this, but the lenders that used to keep their range open as if it was a lower risk purchase have moved away from this or now have specific products only.

Adrian_London_2

Are you asking about the actual mortgage or the idea of buying Shared Ownership?

welnik

I purchased a shared ownership property back in 1989. I borrowed 100% of my share so didnt have to find a deposit which was handy. I am sure that you will find a lender that will did this for you if you go ahead and buy the property. Its not risky lending for the lender as they have first dibs on their money should your house be repossessed or anything. The housing association then get their share. What you will have to pay for are the solicitor's fees and disbursements plus the valuation fee (unless your lender will do a free one). I found when I purchased mine that the building society's valuer disagreed with the selling price by £1000 so I had to find that myself. The housing association usually wont budge on their selling price and go by what their valuer says. I myself think this was a crafty way for my building society to get some financial commitment from us when we purchased. Overall though I have been very happy as the rent is really cheap (£23 per month) but I do own a 75% share. Try the Halifax and the Birmingham Midshires. I have had mortgages with them on a shared ownership basis.

chump

Thanks for all of the replies. However it looks like a no go

I have a bad credit rating and from what my Financial Advisor tells me its difficult enough to find anyone who will do a shared ownership mortgage these days let alone for someone with a dodgy credit background.

The question i still have is that SO Properties are for people that can't afford to buy a property on the open market. I'd assume this relates to people on low incomes or people with bad credit.....so how the hell am i meant to get a house?.....it really sucks as I'm hard working earning 25k and have a nice £7k deposit now.....ok i messed up a few years ago with credit but I'm back on track now.....i bet Mr Immigrant would get a house just like that..... >:(

welnik

How bad is your credit rating? There are lenders out there that will still lend to you but just charge a slightly higher rate. Amber Homeloans and Kensington are two of them.