Get onto the Property Ladder with a Shared Ownership Mortgage

Homeownership can seem like a distant dream for many people, however the government has launched several schemes to help people own their homes such as the Help to Buy scheme or the Shared Ownership scheme.

What is Shared Ownership?

This is where you can buy a share of the property, starting from 25%, and then rent the remaining share. For example if a property is valued at £200,000 you could buy a 40% share valued at £80,000 and then pay rent on the remaining 60% that you don’t own. When people buy their share they tend to put down a small deposit and then require a mortgage to complete their share purchase.

Where are Shared Ownership properties available?

You can find properties for sale by visiting property portals such as Rightmove, Zoopla. There is a website called Share to Buy which specifically shows only shared ownership properties for sale. On these websites you can register your details, so you can then be notified of new properties that become available within your criteria.

Are only New build Properties available for shared Ownership?

No. You can buy shared ownership properties which are New, but also second hand properties are available. Using the above property portals will help you identify available properties in your desired area.

Can you buy more shares within the property?

Yes you can purchase further shares within the property and this is known as ‘staircasing’. When you buy further shares they will be sold at the current market value. Many people remortgage and capital raise to buy the additional shares within the property.

When do I apply for a shared ownership mortgage?

These are the steps to go through when buying a property:

1. Look around online to see what properties are available in your areas and what sort of prices they are.
2. Speak with a mortgage adviser, who can assess your situation and advise you on what mortgage options are available. At this stage your mortgage adviser will require a credit report from you and they will arrange for an ‘Agreement In Principle’ to be agreed. This involves the lender credit checking you and confirming that based upon the information provided by the broker they would be happy to lend subject to verification of the information and a valuation taking place.
3. View the property and have an offer accepted. The estate agent may want a copy of the ‘Agreement in Principle’ from you.
4. Your mortgage broker will submit the mortgage application and provide all the relevant information to the lender. You will also instruct the conveyancers at this point.
5. Once the lender has completed their underwriting checks and a satisfactory valuation has been done a mortgage offer will be issued.
6. The conveyancer will receive the offer, carry out their due diligence, make enquiries and all being well, liaise with all parties to schedule an exchange and completion.

How to speak with a mortgage adviser?

The shared ownership mortgage with bad credit The Money Hub would be happy to help you with any enquiry you have. You can call the office or complete the above enquiry form to schedule a call.