Shared Ownership Mortgages
Shared Ownership and Shared Equity are the two
main types of low-cost home ownership schemes run by
the Government to help people who cannot afford to
buy on the open market to purchase their own homes.
What is Shared Ownership?
Shared Ownership schemes have been devised by the
Government to assist key workers and individuals who
are considered in need of assistance with housing.
You would need to contact your local Housing
Association to identify whether you qualify for
Shared Ownership in your area.
The term Shared Ownership means owning part of
your property in conjunction with a co-owner; which
is typically a Housing Association. You take out a
mortgage for the part that you own (you are able to
buy a 25%, 50% or 75% share in your home) and pay
rent to the Housing Association for the remaining
share of the property that you do not own. The
bigger the share that you purchase, the less rent
you have to pay. When you can afford to do so, you
can buy more shares (known as staircasing) until you
own your home outright. Many Housing Associations
require that you to have a Shared Ownership mortgage
agreed in principle before they can offer you a
property.
Shared Ownership Lenders
There are only a limited number of lenders in the
mortgage market who will lend for this type of
arrangement – some lending the full 100% of the
share. We have access to all the mortgage lenders in
the Shared Ownership market, including those that
may be able to offer adverse credit solutions.
Shared Ownership mortgage lenders will need to gauge
that you are able to afford both the mortgage
payment and the rental payment (for the rented share
of the property) when calculating your
affordability.
What is the Difference between Shared Equity and
Shared Ownership?
The main difference is that with Shared Equity
you buy a given equity share in a property but do
not pay rent on the remaining share; however, with
Shared Ownership you pay rent on the equity share
that the Housing Association retains. Click here for
information about Shared Equity Mortgages
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