Friday, 16 January 2015

BUYING YOUR OWN HOUSE?

Mortgage Buzz

Shared Ownership – How Does It Work

*For members of HM Forces there is the Forces Help To Buy (FHTB) Scheme but there are also other Help-to-Buy Schemes available to qualifying buyers – Forces and Non-Forces.

Shared ownership is a service that has been provided through Housing Associations for some time now and allows people to part-rent and part-own a property.

It is aimed at people who aren’t in a position to buy their home outright; Shared Ownership lets them buy a stake of 25-75 per cent in the property with a mortgage and they then pay rent on the remaining share that remains owned by the housing association. The amount of rent they will pay can be up to 3% of the Association’s share of the property value – the share that the Association retains.

Example
If there was a property valued at £160,000 and it was bought on a 50% share, the initial rent would be £80,000 x 3 per cent = £2,400 per annum = £200.00 monthly.
The mortgage payment for the £80,000 you have purchased would be payable as well as the rent.

Keep buying more of your home…

This is known in the business as ‘staircasing’, you can buy additional shares in your property whenever you can afford to, right the way through until you own the property outright. Each time you ‘staircase’, the rent payable will be recalculated and will reduce proportionately. However, you are never compelled to buy further shares and the original share split can remain in place.

The shared ownership schemes are important in helping people who are looking to get a foothold on the property ladder but are struggling to do so, and, as with any housing scheme, it is important to discuss the details with a professional mortgage adviser who will be able to find the most suitable deals for your situation.

For more information on a wide range of Government Help-to-By Schemes go to:
www.gov.uk/affordable-home-ownership-schemes

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