Buying a house through a shared ownership scheme is a mix between buying and renting. What we mean by this is that you purchase a percentage share of a property usually between 25% to 75% and you then rent the remainder at a reduced price.
Shared Ownership schemes are typically aimed at first time buyers although this is not exclusively, and certain local schemes may aim properties at groups of individuals for example key workers.
When considering a mortgage for a shared ownership property it is important to discuss the situation with your mortgage advisor as not all mortgage lenders provide shared ownership mortgages.
In addition, it is important to understand the situation as a whole and a few key pieces of information that will be needed are as follows:
- What is the percentage share being purchased?
- How much is the rent for the remaining share?
- Are there any other costs over and above the rent? For example, service charges.
- Are there any restrictions on the property? For example, who it can be sold to now and in the future.
When discussing shared ownership properties, it is also important to understand the stair casing situation, as this can impact on the mortgage lenders available. Staircasing is the ability in the future to buy more of the property. For example, if you currently own a 25% share and rent 75%, you may wish to purchase a further 25%, so that you own 50% and rent 50%.
It is always recommended that you discuss your shared ownership mortgage situation as soon as possible, so please get in touch today.