I think everyone has ideals and expectations to what their first family home will look like, whether that is as a couple or a small family hoping to grow. My sister is currently looking to buy her first home with her partner and is scanning all the options possible to make it not only a happy first home, but an affordable one too. As first time buyers there are a lot of things to consider when buying your first home from who to use as a mortgage provider to the many different incentives and schemes available to first time buyers. One thing I know for certain is that when you’re paying full rent its quite difficult to save for a big deposit on a full mortgage and I think that is where shared ownership schemes bring in a happy balance.
What is Shared Ownership?
It’s pretty simple to define really as it’s exactly what it implies – you, the buyer, owns a specific share of the property and a local housing association owns the rest. This allows for lower income families or younger couples to save up a considerably smaller deposit as they are purchasing a smaller share of the property. This usually starts from a 25% ownership share however, there are bigger shares available depending on the property. You do have to pay both mortgage and rent to the housing association but this doesn’t necessarily mean you will pay more than someone that buys their home with full ownership.
What are the eligibility requirements for Shared Ownership?
Those buying the house and applying for the mortgage must be 18 years old and over and have a household income under £80,000 per year. This scheme is designed to get lower income families and couples on the property ladder by owning some equity in their house. You will need to be able to provide proof of income, residency and identification when applying for a shared ownership scheme.
How do you find the best shared ownership mortgage?
The best way to do this is with a mortgage advisor who can go through everything with you and you can lay all your cards on the table once you’ve found a suitable property to consider buying. I have seen a portion of new build properties offer this scheme in the past and I have also seen these types of properties advertised with estate agents online. It is worth noting that not all providers will cover shared ownership so you might want to look at a suitable mortgage broker such as Mortgage Light to find the most suitable shared ownership mortgage for you. Mortgage brokers do all the searching for you and present you with the best offers, rates and give you as much information about the provider as possible. It’s a reputable way to find a good mortgage at a rate that you can afford without doing all the searching manually yourself which can seem a bit overwhelming.
Finding the perfect home and staircasing to own it outright
I think this is the most exciting but also the most daunting part because we all have expectations about our perfect home and requirements that we think will make it a place we want to settle down into. Of course once you’re in a shared ownership property the memories you make together and the life you live in it, the decor and finishing homely touches, might make you want to consider owning it outright. Some shared ownership properties allow what is known as ‘staircasing’ where you purchase a larger share of the property. This of course requires you to have a bigger mortgage and further savings for deposits but it also means you own more of the home you’ve come to love and pay less rent to the housing association. It also gives you more time to save and be able to afford a bigger mortgage and eventually the entire share of the house.