Mortgages for Shared Ownership Finding The Best Shared Ownership Mortgage Deal For Your Circumstances
Shared ownership mortgages are different to residential mortgages and enable those who might not have the affordability to purchase all on their own, and get their foot on the property ladder. If you are looking to purchase a shared ownership property, our specialist affordable housing mortgage advisors are here to help you get started.
We'll explain all the intricacies of this type of ownership, and what the financial implications will be for you in the future. When your income is limited and saving a big deposit is difficult, our team are determined to find you a solution and help you kickstart your future plans.
What is a shared ownership mortgage?
Also known as ‘Part Buy, Part Rent’, a shared ownership mortgage is an alternative solution for first-time buyers who may be struggling for affordability. Instead of purchasing a whole property, you purchase a share in a home – usually between 25% and 75% – and pay rent (usually below market value) on the rest to a local housing association. In the future, you can do what is known as staircasing and purchase additional shares up to 80% or 100% depending on the rules particular to that property.
If you think the shared ownership model might suit your circumstances, give us a call! Our team of expert mortgage advisors will explain the intricate details of this type of mortgage and help set you up for success with mortgage lenders.
Who is eligible for a shared ownership mortgage?
To be eligible for shared ownership, you would normally need to meet the following shared ownership eligibility criteria:
- You are at least 18 years of age.
- You have an annual household income of below £80,000 (or £90,000 if you live in London).
- You don’t own another home in the UK or another country.
- You are a first-time buyer or a previous homeowner that now can't afford to buy (or you already live in a shared ownership home or rent from a council or housing association).
- You can afford to meet your monthly mortgage payments and also pay monthly rent.
Maximise your chance of approval with specialist advice from an expert in Mortgage for Shared Ownership
What are the benefits of a shared ownership mortgage?
Shared ownership can be a great solution for many people looking to get their foot on the property ladder. Here are some key advantages of this type of mortgage.
- Requested deposits are usually lower than with a regular property purchase (around 5-10% of the share you are buying is quite typical).
- Shared ownership mortgages are usually lesser in value, making them more affordable.
- There is the option of staircasing meaning as you earn more, you can buy additional equity in your home.
- Providing you can afford to keep up with payments you can have the security of living in the home for the term of your lease, usually 99-125 years.
What are the disadvantages of taking out a shared ownership mortgage?
Despite the positive aspects of shared ownership mortgages, there are some implications that are worth thinking through before making a decision.
- Not all lenders offer shared ownership mortgages, so you may limit your borrowing options even with a good credit history.
- You have to pay 100% of ground rent and a service hold because the property will be leasehold. However, if you staircase up to 100%, you will have the option of purchasing the freehold title.
- You may have to obtain permission from the housing association to make any structural changes to your home.
- When selling the property, the housing association may have a say in who you sell to.
Shared ownership mortgages FAQs.
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Professional advice & support for your shared ownership mortgage.
When the Bank Says No is a team of affordable housing mortgage advisors trusted by first-time buyers all over the UK for the quality of our advice and the friendliness of our approach. We're determined to find your mortgage, even when there are obstacles in your path.
Whatever you've been through and wherever you're going, we're here to help you realise your future plans. From analysing the market to working out shared ownership affordability to finding appropriate mortgage deals and helping you finetune your application, we'll be here every step of the way.
Advice you can trust.
We're here to help you buy your first home against all the odds. Shared ownership can be a great way to do that, but you might be worried about the implications.
We won't push you into anything or leave you in the dark. Instead, we'll be on hand every step of the way to explain, reassure and guide you towards the move-in day. Our friendly team are taking the fear out of the mortgage process. Let's get your journey started!