Is budget a constraint for you to dream a fantastic new house? Do you think it is not possible for you to accept loans or save huge money? If yes, then shared ownership is a better solution. It is a route that gains increasing popularity throughout the UK. Ask about to any of the affordable home specialist; they will be able to explain the costs and processes involved.
What is Shared Ownership all about?
In simple words, shared ownership is nothing but a partly rented, partly bought scheme backed by the government which allows 35 to 75 percent of the new property. It is possible to pay rent on reminders. When you find a great home, but you do not afford the mortgage on the full asking price, there is no better option than shred ownership.
You will need only a small deposit of 5 percent to own a shared property.
The process of shared ownership
You need to imagine a situation to understand the process of it. Suppose you need 200,000 Pounds to own a house, but you can borrow at the most 100,000 Pounds according to the size and income of your house.
In this example, the best choice is to own the property on a shared basis. You can buy half of the property, and the financial company you will be borrowing money from would own the remaining half amount.
Since you need to pay 50 percent monthly rent and there is only 5 percent additional deposit required, you have limited exposure. The maximum mortgage level of 45 percent is possible. You share in your property and buy more shares. You can either share or buy as circumstances change.
Eligibility of applying for Shared Ownership
Shared ownership is a great choice for those who struggle to buy a home on the open market. When you are a first-time buyer, and you are in permanent employment; always prefer shared ownership. You need to have the household income of up to 80000.
Fill out the form on the website and contact the local sales team. There are several choices available on the Internet that can offer shared ownership. Along with 5 percent deposit, you are required to pay for reservation fees, mortgage valuation, survey, stamp duty and legal fees. Since every service provider has different rules, eligibility should be checked first.
What’s the application process?
You need to search for the housing association and local council to check what schemes are available and what is your eligibility for it? Find out whether you can get the mortgage or not? All lenders will not give you the mortgage for shared ownership, but many of the big mortgage owners will do it. There are strict affordability checks by the lenders when you apply for it.
Total affordability should be checked while going for it. For example, mortgage fees, moving cost, insurance, repairs, maintenance and stamp study. For flats, you need service charge separately. Maintenance costs are required to be paid in full even if you need half of the shared accommodation cost.