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Shared Ownership – What is it? How does it work?

Shared Ownership Mortgage Advice in Cardiff

What is shared ownership?

Shared Ownership is a help to buy scheme designed by the government to help first time buyers and home movers get onto the property ladder.

The scheme allows you to buy a share of a property (usually between 10% to 75%) and then pay the remaining share back on rent. If you situation changes, such as getting a higher paid job, you could look at increasing the percentage share that you own. Sometimes, you can increase your share to 100% and take full ownership of the property, whereas, some building societies may not allow you to do this and put a limit on the amount that you can own.

If you meet the requirements for this scheme and are a First Time Buyer in Cardiff, it can be a great mortgage option to look at, especially since it helped you get onto the property ladder.

How does the scheme work?

First of all, like any mortgage, you’ll need to put down a deposit. The minimum amount that you need to put down can vary from property to property; it can also change depending on your credit score.

You will be taking out a mortgage based on the percentage that you own. For example, if you are wanting to own a 50% share of a property that is worth £200,000, you will need to take out a mortgage worth £100,000.

Furthermore, you will not need to provide a deposit based on the price of the property, it will be based on the share that you took out. If you’re required to meet a minimum of 5%, on a £100,000 mortgage, you will need a £5,000 deposit.

Once your offer has been accepted and you’ve moved into your property, you will start paying off your mortgage and also receive rent based on the remaining percentage of the property.

Even though you have two sets of payments, your overall monthly costs shouldn’t add up to as much if you had taken out a ‘regular mortgage.

Costs and fees

There are lots of different types of costs and fees that come with taking out a mortgage. When taking out a Shared Ownership mortgage, you may face set-up/arrangement fees, legal fees and possibly booking fees. Double-check with your Mortgage Advisor in Cardiff about other costs before you continue.

Property to property, costs can vary. This will be factors such as deposit size, monthly payments arrangement fees and even stamp duty.

How can I apply?

First of all, if you want to check whether you qualify for the Shared Ownership scheme or not, you can get in touch with our team and we can arrange this for you. All you have to do is book your free mortgage appointment online!

Here are the schemes basic requirements:

  • You have to be at least 18 years of age.
  • If you are living outside of London, your total household annual income must be less than £80,000.
  • You are a First Time Buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.
  • If you can afford to purchase a property on the open market, you will not access this scheme. 
  • You must prove that you are not in any arrears, such as mortgages and rent.
  • You must provide evidence supporting a good, clean credit history—having a CCJ on your credit file or any other credit-related issues will look bad. 

Each of the help to buy scheme requirements will vary. Some will be harder to match than others, however, when this is the case, it could mean that you are not suited to that scheme.

If the Shared Ownership scheme doesn’t seem like the right fit for you, you can always check out other government schemes on ownyourhome.gov.uk.

Get in touch with a Mortgage Broker in Cardiff today

If you’re a First Time Buyer in Cardiff, we would recommend getting in touch with our mortgage advice team. We can work out your mortgage affordability, how much you can borrow and whether you’re eligible for a help to buy scheme.

We have helped many customers in Cardiff access this scheme and other help to buy options. If you’re looking for Help to Buy Mortgage Advice in Cardiff, you’ve come to the right brokers!

Book your free mortgage appointment online today,

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