Thinking of buying a property - SmartShare has thousands of properties to buy or rent across the UK
Affordable homes for everyone
Thinking of buying a property - SmartShare has thousands of properties to buy or rent across the UK
Whether you have found your new home or just finding out more information about how a shared ownership mortgage works, then you have come to the right place!
To begin with you will need to think about:
1. saving up a small deposit
2. financing the remaining balance with a mortgage
At this stage it is essential that you are able to talk to a shared ownership mortgage specialist who has access to the best rates available from all the high street national lenders. These include Lloyds, Nationwide, Barclays, HSBC and the Royal Bank of Scotland (all of which are major supporters of HomeBuy Direct) as well several regional building societies.
SmartShare is expanding its service to partner the top mortgage brokers who will have expert knowledge of the affordable homes market and be able to save you time finding the best mortgage for you.
If you would like more information, please drop us an e-mail at info@smartshare.co.uk and we will put you in touch immediately.
If you would like an idea of how much your monthly mortgage and rent may cost, take a look at our shared ownership mortgage calculator.
Buying a shared ownership home enables you to buy a home to suit your needs by purchasing a share of the property and paying a subsidised rent on the part you do not own.
Depending on the scheme and personal circumstances:
The purchaser can buy a share of the property e.g. 25%, 50% or 75% and is generally financed by a mortgage available from a high street lender or specialist mortgage lender.
A subsidised rent is payable to the housing association for the share of the property which you do not own. For example if you buy a 30% share, then you will pay 70% of the rent which the housing association would normally charge for the whole property.
Once you have moved in and you can afford to buy a larger share in the property e.g. 10%, 25% then in most cases you can keep doing so until you own 100% of the property outright - this is known as ‘staircasing’.
On average you will need a minimum income of £15,000 per annum to be able to afford a shared ownership home, although this will vary depending on the housing association scheme.
The benefit of buying a shared ownership home means that your monthly mortgage and rent payments are affordable, the cost can be less than renting and it also means you will have a capital stake in your home which may increase.
Here is an example of how much a shared ownership mortgage could cost.
Please note these figures are a guide to illustrate the potential costs and will vary according to the circumstances of your purchase.
A three bedroom house has a full market value of £225,000.
If you were to purchase 35% or 50% of the property your monthly payments would be as follows:
Percentage Purchased 35%
Mortgage (approx 5% interest on repayment mortgage) £540.00
Rent £243.75
Total £783.75
Percentage Purchased 50%
Mortgage (approx 5% interest on repayment mortgage) £708.00
Rent £187.50
Total £895.50
Other costs to factor into buying a shared ownership property:
Service charge - between £25.00 - £120.000 per month depending on the property type.
Expenses - approximately £3,000 to cover legal costs, fees, surveys and so on (these will vary depending on the size of the property).
Mortgage deposit - when applying for a mortgage some lenders prefer a 10% to 20% deposit.
Furnishings - consider how much money will be required to furnish a new property.
If you are still looking for an affordable home click on the SmartShare logo and start searching straightaway. If you have more questions on buying a shared ownership property, please click on the FAQ link below.