Shared Ownership Mortgages

A Shared Ownership mortgage is a government-sponsored programme that allows people to buy a portion of their dream home – often 25%, 50%, or 75% – rather than the entire house and thereby get on the property ladder. The arrangement means they won’t have to put down as much money as they would on the entire house; for example, if the purchasers put down £5,000, that’s 10% of a 25% stake in a £200,000 home.

The buyer will need to pay rent to the owners of the other half of the property – usually a Housing Association – and this should be reflected into their monthly budget. You will, however, have the ability to grow your part of ownership and buy out the rental component over time.

Shared Ownership Mortgage Specialists

While most individuals want to buy a home, some people have difficulty getting on the property ladder, sometimes due to a lower salary. For people who are having difficulty putting together a higher deposit and then being accepted for a mortgage. Shared Ownership can be a crucial initial step toward homeownership, allowing people to buy a larger property than they might have imagined based on their deposit size.

However, not all mortgage lenders are interested in Shared Ownership mortgages, and you may wind up wasting a lot of time looking for one that would consider your application. At The Mortgage Centres, we have consultants that are experts in the field of Shared Ownership mortgages and know which lenders to work with. We’ll also be able to assist you in thoroughly preparing your application so that lenders can see that you’ve budgeted for all of the charges and that you’ll be able to fulfil their affordability requirements.

Can I Remortgage a Shared Ownership property?

Despite the fact that this is not the most frequent type of mortgage available, remortgaging a Shared Ownership property is doable. The premise is the same as with a traditional mortgage: you are loaned money against the value of your property, but in this situation, the property is just your portion of your home. However, if you wish to remortgage to get a better deal, or to take advantage of your property’s higher value and release some equity, the fact that you live in a Shared Ownership arrangement should not prevent you from doing so.

The only drawback may be that Shared Ownership mortgages are only accessible from a restricted number of lenders, so your options will already be limited when compared to the larger mortgage market. Many lenders who do provide Shared Ownership mortgages may not want to work with you directly, preferring to handle applications through a trusted intermediary so that they can ensure that clients are a good fit for their products and vice versa.

It’s also a good idea to check with the property’s co-owners, whether they’re the Housing Association, the local authorities, or another permitted organization, to see if they allow remortgaging. Because rules differ from one local government to the next, double-check that nothing in your agreement prevents you from doing so.

You must as always, ensure that any new mortgage agreement is the best fit for your needs. There are numerous influencing aspects to consider, and what may be an excellent product for one borrower may not be appropriate for another.

Working with a specialist broker, such as our team at The Mortgage Centres, to select the most appropriate product and lender to match your needs and receive help at every level of the application process to give it the best chance of success, is the best course of action. Our initial consultation is always free, and our quotes are free of charge as well. Give us a call right now!

Shared Ownership Considerations

There are a few things to think about when buying a house through a Shared Ownership scheme:

  • Purchasing a Shared Ownership property through a Housing Association, a local authority, or a housebuilder differs significantly from purchasing a home with a friend or relative. It’s more like a business partnership because there’s a clear division of tasks.
  • You’ll need to contact the local Help to Buy agency to identify a property that qualifies for Shared Ownership in the area you want to reside in. They will be aware of what is currently available and what is soon to become accessible.
  • If you decide to raise your portion of the property, the price you pay will be determined by the current valuation. So, if the property’s value has increased since you bought it, the price will be higher; but, if the value has decreased, the portion will be lower.

Even for people with average wages and minimal responsibilities, getting on the property ladder can be difficult. If you have a low income and are dealing with other hardships, owning a home may seem impossible without government assistance. Housing programs like these exist to assist people who need it the most to get their feet wet in the real estate market, allowing them to purchase an asset later in life.

How to find a Shared Ownership mortgage

If you know you meet the requirements for a Shared Ownership mortgage and are considering applying to a lender, your best first step is to speak with a knowledgeable mortgage broker who knows the market, the lenders who are willing to offer this type of loan, and the types of deals you can expect to find. The Mortgage Centres’ specialist Shared Ownership advisors can explain your options and walk you through each step of the process. The initial appointment is always complimentary and includes a no-cost quote.

Shared Ownership Mortgage Lenders

Shared Ownership mortgages are unique in that they are offered against a portion of the property in question (typically a minimum of 25%) rather than the entire house or apartment, with the remaining ownership held by a Housing Association or approved body. The borrower will own a portion of the property and pay rent to the co-owner on the remaining portion.

Because ownership is so complicated, many lenders are unwilling to consider Shared Ownership mortgages. If you need a home loan to buy a portion of a property or to remortgage your portion, your lender options may be limited, and you’ll need help finding the one that is best suited to your needs.

Shared Ownership Mortgage Lenders

Shared Ownership mortgages are unique in that they are offered against a portion of the property in question (typically a minimum of 25%) rather than the entire house or apartment, with the remaining ownership held by a Housing Association or approved body. The borrower will own a portion of the property and pay rent to the co-owner on the remaining portion.

Because ownership is so complicated, many lenders are unwilling to consider Shared Ownership mortgages. If you need a home loan to buy a portion of a property or to remortgage your portion, your lender options may be limited, and you’ll need help finding the one that is best suited to your needs.

The mortgage market is extremely dynamic and ever-changing. The lenders who consider Shared Ownership mortgages, as well as the types of deals they will offer, can vary even from day to day, so compiling a list here would be impractical. Your best bet is to speak with a specialist mortgage broker, who will be able to outline your options and provide you with a clear idea of your next steps.

Shared Ownership Mortgage Rates

If you qualify, selecting the suitable mortgage scheme for your Shared Ownership property will be a critical step on your path to homeownership. As with regular mortgages, the best scheme for you may not always be the one with the lowest headline interest rate, and it’s a good idea to carefully consider your options, taking into account the expected duration of the mortgage.

Shared Ownership mortgages are often distinct products offered by specialized lenders, and their rates will differ from those of their conventional mortgages. As always, the amount of deposit you can provide will have an impact on the deals available, with a larger deposit usually opening the door to a better interest rate.

We are unable to list typical rates because Shared Ownership mortgage deals and rates change over time and vary from lender to lender. However, you should research the monthly and annual costs of the transaction, as well as the anticipated rent payments on the portion of the home owned by the other party, to have a solid picture of how a given rate will play out over the course of the agreement.

Shared Ownership Mortgage Broker

The first step in acquiring a mortgage through the Shared Ownership plan is to contact a Help to Buy representative in the area where you want to live. They will be able to confirm what homes are available as well as whether you match the criteria. When all of these pieces are in place, you’ll be ready to make an offer and find out what kind of mortgage you’ll be able to get.

Our consultants understand the mortgage industry and its numerous lenders and will be able to select the Shared Ownership mortgage plan that will best match your unique circumstances, budget, and lifestyle, while also maximizing your borrowing capacity.

Contact us : +44 7830 885825

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