Shared Ownership
Shared Ownership with NO Broker fees
What is Shared Ownership?
Shared ownership enables you to buy a property that would normally be beyond your affordability. This is acheived by buying a defined share of a property then renting the balance. The rented element is cheaper than a mortgage so it is easier to afford.
Ultimately, you get to live in the property you would like to live in and you also own a meaningful share. If your income increases then you can opt to buy a larger share until you own all of the property
No Broker Fees
NO Broker fees for Shared Ownership mortgages - providing your mortgage is at least £100k.
If your mortgage is less than £100k then we can still help, but there will be a fee of £199 to pay
Why Mortgages Direct
Mortgages Direct are a Mortgage Broker regulated by the Financial Conduct Authority - check us out at the FCA Register (enter ref 303319)
You will need a financial adviser for this mortgage - we can help!
We can check affordability and arrange a Shared Ownership Mortgage Agreement in Principle.
We have access to most Residential lenders including Broker only deals
Full Illustrations are available.
Deposit for Shared Ownership
The deposit for this purchase is based upon YOUR SHARE of the property. Lets give an example
Say the Property is valued at £300,000 (FULL VALUE)
You are interested in buying a 40% share, with a value of £120,000
Your deposit would be £6,000 (5% of £120,000)
Do you qualify for a Shared Ownership Property
You will need to qualify for a Shared Ownership property
BOTH of the following must be satisfied:
Your household income is £80,000 or less (£90,000 in London)
You can't afford the deposit and mortgage payments for a property that meets your needs
And ONE of the following:
You are a first time buyer
You used to own a home but can't afford to buy one now
You are forming a new household - for example after a relationship breakdown
You are a homeowner but and want to move but cannot afford a new home that meets your needs
You are an existing Shared Ownership owner and wish to move house
If you are currently a homeowner you must complete the sale of your property on or before completion of your Shared Ownership property
For some property, you may have to show that you live or work in an area to show you have a local connection
Costs of Shared Ownership
The costs will depend on the property value and the share purchased, but you will have the following types of charges. Let's take another example:
Property value £400,000
40% share is £160,000
Your deposit is £8,000 (5%), requiring a mortgage of £152,000
Mortgage monthly payment £889
(calculated using an interest rate of 5% capital and interest over 25 years)
Rent on £240,000 charged at 3%, £600 pcm
Service charges £25 pcm
Total monthly charge £1514
(889 + 600 + 25)
Shared Ownership - Things you should know
You can buy a share between 25 and 75% of the property value. It is possible to buy 10% in some cases. The Housing Association or Local Authority will keep the balance and will charge you rent on their share.
You can increase your share of ownership up to 100% at any time. This is known as 'staircasing'
All shared ownership properties are leasehold properties and you will pay a Service charge and Ground rent. You can ask the Landlord for a breakdown of any charges.
The service charge will normally include the cost of buildings insurance
The Housing Association's share of your property may increase in value if the value of your property has risen. This will mean that it will cost you more to buy the remaining share
The Landlord can increase the rent in the future
The rent will not reduce in the future
A reservation fee of up to £500 may be charged. This will secure your home for a period. The fee will be deducted from the purchase price
Check with the Housing Association that IF you decide not to proceed will you get the reservation fee refunded?
You will need to budget for your Solicitors fees
Other fees may apply in certain circumstances. For example, an Estate charge my be paid towards the cost of maintaining communal areas. Ask about any additional charges
Older Persons Shared Ownership (OPSO)
If you are age 55 or over then you may qualify for a OPSO scheme. This is very similar to the Shared ownership model except you do NOT have to pay rent once you own a 75% share. So you could buy a 75% share at the outset OR you could buy a smaller share then opt to buy a larger share later on. Once you own a 75% share you do not pay any rent
The Right to Shared Ownership
This initiative enables Tenants to buy an equity stake in their homes of between 10 and 75% of the full market value.
The remaining Equity is held by your current landlord and you will pay rent on this element
Who has the Right to Shared Ownership
You need to live in a property where the Right to Shared Ownership will apply
You have been living in your current home for at least 1 year
You have been a Tenant in social housing for at least 3 years
You are NOT in arrears
Your landlord should notify if you qualify for the Right to Shared Ownership
Shared Ownership - Frequently Asked Questions
Can I have ANY mortgage secured against a Shared Ownership property?
No, you must have a Mortgage suitable for a Shared Ownership property
Can I have a fixed rate on my mortgage?
Yes, of course. There should be good choice of mortgage deals available
How much deposit will I need
You will need a minimum 5% of YOUR SHARE of the property. If your share is 25% of a £400k property (full value) then you will need £5,000 deposit (5% of £100,000)
Can I buy a previously owned property using Shared Ownership?
Yes, providing the property is being advertised as Shared Ownership or is being offered by a Housing Association or Local Authority under Shared Ownership
If you are buying a property that was previously financed using Shared Ownership, please note that the rental element will be set at the same interest rate as the previous owner was paying
How will I find a Shared Ownership property
As a starting point, try doing a Google search for 'shared ownership property' in the area you want to live
Are there any alternatives to Shared Ownership?
There could be other possibilities. Please fill in our Enquiry form