An initial agreement confirming how much you could be able to borrow. Read More
A shared ownership mortgage allows you to purchase a portion of a property while paying rent on the remaining share owned by a housing association, with the option to buy more shares over time. Read More
Get on the property ladder by combining a small deposit with an equity loan.Read More
A Mortgage in Principle can provide you with a useful guide as to how much you might be able to borrow and give sellers confidence in your offer, but it’s not a guarantee that you’ll be able to get a mortgage.
You can take out a mortgage for the share of the property you’re buying but you’ll usually need to put down a deposit of at least 5% of that share. For example, if you’re buying a property costing £200,000 and the share you’re purchasing costs £75,000, you’ll have to put down a deposit of at least £3,750 (5% of £75,000).
It’s not a legal requirement to have a Mortgage in Principle before you start house hunting, and you don’t need one to make an offer. However, sellers will take you more seriously if you have one in place before you start viewing homes, increasing the likelihood of your offer being accepted. It can also be helpful for you when it comes to working out your budget and finding properties in your price range.
You can’t buy a second property (either in the UK or abroad) when you own a home under a Shared Ownership scheme, but it is possible to move between homes. That said, selling a shared ownership property can be a little more complex than a regular sale. If you don’t own all of the property, you might first need to offer it back to the housing association. If they cannot find another buyer in a certain timeframe (usually 6-8 weeks) you can market the property yourself. Understanding the details can be a little tricky so speak to us at Mor-Invest for further clarification.
Although not exclusively for first time buyers, shared ownership can make it easier to get onto the property ladder if you’re struggling to save up enough money for a deposit. The monthly payments are often cheaper than if you had an outright mortgage, and are also usually lower than renting privately. However, you should be aware that as you’re a tenant until you staircase to 100% ownership, your landlord has the right to evict you. You also aren’t allowed to sublet your home, and as such, shared ownership properties are leasehold, you’ll be subject to the associated fees.
You’ll usually need to put down a deposit of at least 5% of the value of the share of the property you’re buying. The bigger the deposit you can afford to put down, the wider the choice of mortgage rates you’ll have access to.
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