In This Article
What is a shared ownership mortgage?
A shared ownership mortgage is where obtain finance against a property you part buy and rent the other share. Known as the shared ownership scheme.
For instance, if a property is valued at £250,000, the Housing Association selling it is offering a 40% share, and the price of this share is £100,000.
Once you purchase the share and move into the property, you would pay the mortgage on the part you own and rent on the other 60% of the property.
If you were putting down a 10% deposit on your share, you would place £10,000 down and take a £90,000 mortgage.
When considering if you can afford to live in a shared ownership property, you need to factor in the mortgage payment, rent payment and often service charges.
A mortgage adviser would be able to tell you what deposit you would need to put down for each property and what you will be able to borrow.
If you would like, I NEED ADVICE to put you in touch with a qualified mortgage adviser who can tell you your options around shared ownership mortgages; please complete the contact form.
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Is a shared ownership mortgage broker the same as a regular mortgage broker?
A shared ownership mortgage broker may be a standard mortgage adviser with experience in arranging ownership mortgages.
However, it may be that the individual only arranges shared ownership mortgages, giving them vast knowledge in this subject.
You could find this out by speaking with individual mortgage brokers and asking them their background.
Mortgage advisers can give you a free consultation before any chargeable work begins.
What should I look for when searching for a shared ownership mortgage broker?
If you are looking for a shared ownership mortgage broker, it is essential to find out whether they have experience in transactions similar to yours.
Most mortgage brokers will be able to tell you this when you give them details of your situation.
If you have a friend that has recently taken a shared ownership mortgage and used a shared ownership mortgage broker, ask them their feedback on this mortgage broker.
If they were happy with the service, perhaps ask them for the broker’s contact details. It is also wise to check reviews to find out how others found the service. Always do your due diligence when choosing a mortgage adviser.
Do Housing Associations work with a shared ownership mortgage broker?
If you buy a shared ownership property through a Housing Association or the council, they may have access to a shared ownership mortgage broker.
Institutions such as these regularly sell shared ownership properties, it is likely that they will have a contact that helps to arrange shared ownership mortgages. If so, you could ask them for an introduction.
You are not obligated to use a mortgage adviser recommended by an estate agent or Housing Association and are free to pick your own.
If you would like to talk to a mortgage adviser with experience in shared ownership mortgages, I NEED ADVICE can arrange this for you.
If you would like this, please complete the contact form.
Can you get you shared ownership mortgage if you have bad credit?
Some mortgage lenders are willing to consider applicants for shared ownership mortgages if they have bad credit.
Bad credit mortgages are generally considered under a complex mortgages, so it will depend on other things when getting a mortgage. For example, the level of your deposit will be taken into consideration.
Also, your income and debt obligations will be factored in too.
For lenders that allow adverse credit, we’ll need to know the entire history of the terrible credit events.
Bad credit can mean many different things, such as missed payments, arrears, defaults, county court judgements, bankruptcies, individual voluntary arrangements, etc.
Your mortgage adviser would need to know the details of your bad credit and whether it has now been repaid.
They would need a copy of your credit file to see the full details of the bad credit. You can get a copy of your credit report by going to Check My File.
Can you get shared ownership mortgages on buy to let properties?
Getting a shared ownership mortgage on a buy to let property is impossible. Shared ownership properties are offered to people that qualify for the scheme and not buy to let mortgages.
It is a condition when somebody buys a shared ownership property for their use. The scheme is in place to help people buy their homes when they otherwise may not have been able to.
As a result, buying a shared ownership property to use as an investment property and letting to a tenant is against the scheme rules of the shared ownership.
Would a shared ownership mortgage broker charge me a fee for arranging a mortgage?
Different mortgage brokers charge in different ways. The amount a mortgage broker charges will vary across all firms.
Some mortgage advisers do not charge at all, whereas some always charge a fee for arranging a mortgage.
If you were looking to talk to a mortgage adviser about your options around shared ownership mortgages, most mortgage advisers would offer a free consultation.
The mortgage advisers that charge fees would usually spend some time working out what they can do for you before advising you of any charges that would be applicable.
Here you can find more information on fees and charges – Mortgage Broker Fees Explained.
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Conclusion
If you were looking for a shared ownership mortgage broker to arrange your shared ownership mortgage, always do your due diligence.
Some mortgage advisers specialise in different areas giving them their own experience. It is always advisable to ask your mortgage broker what their background is and whether they would be able to help you, given your situation.
A mortgage adviser will tell you what you will be able to borrow and the amount you would need to put down as a deposit.
Please complete the contact form if you would like. I NEED ADVICE to match you with a qualified, experienced mortgage adviser to explain your shared ownership mortgage options.
The information on this page is not tailored to any individual readers and should not be considered financial advice under any circumstances.
If you are seeking advice about a mortgage, you should consult a qualified professional.
