Check eligibility for a shared ownership mortgage
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You’ll generally need to put down less of a deposit, for example, a 5% deposit rather than the usual 10–20% deposits required for standard mortgages, as the deposit you pay is only for the part of the property that you’ll own.
Shared ownership mortgages are usually available on new-build properties as they tend to be built for that specific purpose by a housing association.
While shared ownership mortgages might make sense for some people, they’re not without risks so it’s important to get your head around them first before deciding if they’re right for you.
Not everyone is entitled to a shared ownership mortgage and the eligibility criteria does vary across the UK.
In England, you may be eligible to purchase a home with a shared ownership mortgage if you meet the following criteria:
All shared ownership properties are leasehold in England and Wales so check your own circumstances carefully to see if you qualify for a shared ownership mortgage.
You’ll be able to carry on buying more of the rented portion of your home from the housing association, generally until you own 100% of it. This is known as “staircasing” but the amount you pay for the remaining shares of your property will depend on what the housing association charges you. For example, if the value of your property has increased over time, expect to pay more for the remaining share, and if its value has decreased, expect to pay less.
The housing association is likely to get your property valued first and then decide on the cost of the remaining share, though you may be required to pay for any fees associated with this valuation.
Each shared ownership mortgage lender will have its own set of eligibility criteria but it’s also worth considering some of these factors before committing to a mortgage:
A mortgage broker is a professional with an in-depth knowledge of the mortgage market, who you can instruct to find the best mortgage for your circumstances.
They have a deep understanding of individual lender’s eligibility criteria, so they’ll be able to point you towards the lenders most likely to approve your application.
This can be particularly useful for applicants who have low income or a poor credit score, as it can save them from being rejected by multiple lenders.
It’s possible to work with a mortgage broker that specialises in the shared ownership market. By doing so, you can gain the peace of mind of knowing you’ve secured the best possible deal available to you.
Some mortgage brokers charge a one-off fee, but this is usually eclipsed by the savings you make when choosing the best mortgage over more expensive ones.
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