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Shared Ownership

Explore the pros and cons of shared ownership with a trusted mortgage broker.

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What is a shared ownership mortgage?

A shared ownership mortgage is a loan from a bank that allows you to purchase part of a property and rent the rest.

The property you purchase will need to be listed for sale as part of the shared ownership scheme.

Usually, you can use a shared ownership mortgage to purchase 25% to 75% of the property, although you can by 10% on some homes, you’ll then pay rent on the other part.

You’ll need a 5% deposit for your mortgage, it’s 5% of the share you are buying and not the total value of the property.

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How to get a shared ownership mortgage?

Getting a shared ownership mortgage can be more difficult than a regular mortgage due to the increased administration that is involved with the scheme.  It’s always good to have a mortgage professional by your side.

A shared ownership mortgage broker will help you compare deals to recommend the best one for your personal situation.

Shared ownership isn’t for everyone, your mortgage advisor will help you understand both the pros and cons of the scheme.

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Compare shared ownership mortgages

Our shared ownership mortgage brokers will help you compare 1,000s of mortgage deals available for your specific requirements.

Shared ownership mortgage options include:

  • Fixed and variable rates.
  • Bad credit/CCJ.
  • Employed or Self-employed.
  • Joint names.
  • Something more complex.

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FAQs – Shared Ownership Mortgages

Are shared ownership mortgages more expensive?

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Yes, typically shared ownership mortgages are more expensive than standard mortgages due to the following:

  • Increased administration involved with the scheme.
  • They are deemed as higher risk by the lender.
  • Not all lenders offer them.

However, even factoring in the additional expense, a shared ownership mortgage can provide a great opportunity to get on or move up the property with little deposit.  Even considering the rent that you pay for the share that you do not buy and the service charge, it can work out cheaper than privately renting.

In the future, if you choose to staircase up and buy 100% of the property you will then be able to remortgage this onto a standard mortgage deal.

Do you pay rent and mortgage on shared ownership?

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Yes, with a shared ownership property you’ll pay rent and service charges to the landlord on the part of the property that you do not purchase.

The rent payable will need to be factored into your affordability when we calculate your mortgage borrowing.  There will be an agreement in place between you and the landlord stipulating how much and when the rent is due, also, how much the service charge is and what is included.

In the future, if you own 100% of the property, no rent will be payable to the landlord.  Due to shared ownership properties being leasehold, a service charge will be payable.

Is it difficult to get a mortgage with a shared ownership?

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Getting a mortgage with shared ownership is a very similar process to a standard application although the rent you’ll pay plus any service charges/ground rent will be considered.  They are not considered as difficult with a good shared ownership mortgage broker on your side.

To get a mortgage with shared ownership we’ll need to consider:

  • Your income including the stability, amount, and regularity.
  • Existing credit commitments such as personal loans, car loans, credit cards etc.
  • Account conduct, your credit score will be assessed.
  • Affordability, how much spare income you have left over per month.
  • Your dependants, how many people are relying on your income such as children.
  • The amount of deposit you must put down, the more you can put down, the cheaper your mortgage payments will be.

Shared ownership mortgages can be complicated, therefore, having a specialist mortgage broker by your side can prove invaluable.

Will banks lend on shared ownership?

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Yes, banks will lend on shared ownership, however, not all of them.  Shared ownership mortgages are specialist lending, therefore, not all banks offer them.

The good news is that a lot do including some big high street lenders. There are also options available in the marketplace for those who have bad credit, a CCJ, or are self-employed.

All banks will have their own rules and criteria surrounding shared ownership mortgages therefore, which one will be best will be based on the property you are buying, the area, the share you are purchasing, and your personal situation.

Do you a pay mortgage on shared ownership?

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If you cannot afford to buy a share of the property with savings, then, yes, you’ll need to pay a mortgage with a shared ownership property.

If you can afford to pay for the share of the property with your savings, then you don’t have to get a mortgage.

If you require a mortgage, you’ll pay this along with service charge, ground rent, and a share of the rent per month.

Is shared ownership ever worth it?

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We think so, for the right individuals shared ownership is a great way for both first time buyers and home movers to buy a property without a large deposit.

Saving for a deposit can be difficult and take a long if you are currently renting or paying a mortgage.

The deposit required is a minimum of 5% of the share you are buying and not the full market price, for example, if you were buying a 50% share of a property worth £200,00, you’d need a minimum of £5,000 deposit. Without the scheme, this would have been £10,000.

If you can afford to buy a property that meets your family requirements without the scheme then you wouldn’t be eligible.

Can I buy a bigger share of my in the future?

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Yes, if you can afford it, you are able to ‘staircase’ up and buy a bigger share in your property in the future.   There will be terms and conditions about how much you can buy and when by your landlord.

To raise the money to buy the additional share you can use either a further advance mortgage from your existing lender, a remortgage if you are no longer tied into a deal, or a secured loan.

What is the minimum income for shared ownership?

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There isn’t one!  There is no minimum income for shared ownership however, if you require a mortgage, you’ll need to pass your lenders affordability assessments.

There is a maximum household income you can earn to be able to qualify for the scheme, the amount will vary depending on where you live.

Is there a downside to shared ownership?

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The downside to shared ownership is that it can be expensive monthly as you must factor in your mortgage payment, ground rent, service charge, and rent on top of your other outgoings such as life insurance, home insurance, energy bills, council tax etc.

In the future, if you choose to buy a bigger share, the amount of rent you’ll pay will reduce.

How do you get approved for shared ownership mortgage?

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You’ll increase your chances of being approved for a shared ownership mortgage by using a mortgage broker.

A mortgage broker will run through your income and expenditure and let you know how much you can borrow on a mortgage and how much your payments will be per month.

If you have conducted your finances well such as been up to date with payments, not going over your overdraft, earn more than you spend, don’t have lots of gambling transactions, and have good credit, this will increase your chances of being approved for a shared ownership mortgage.

Can you do shared ownership without a deposit?

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No, you’ll need to put down a 5% deposit for a shared ownership mortgage, however, it’s 5% of the share you are buying.

100% mortgages for shared ownership properties are not available, the highest loan to value deal on the market is a 95% shared ownership mortgage.

The deposit for a shared ownership is smaller than that with a regular mortgage as it is based on the part you are buying and not the full market value of the property.

Is shared ownership better than renting?

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Whether shared ownership is better than renting will depend on your personal situation, it’s not for everyone.

If you are currently renting, the advantages of shared ownership are:

  • You’ll only need a 5% deposit calculated on the share you are buying.
  • You’ll be able to afford a bigger property using the scheme.
  • Rent can be ‘dead money’, so you’ll be benefiting from your share of house price increases.

For renters, the disadvantages can be:

  • You’ll be responsible for the maintenance and upkeep of the property.
  • You’ll still need to pay rent on the share of the property that you are not buying.
  • There will be a ground rent and service charge to pay.
  • They can be harder to sell down the line.
  • The interest rate that you’ll pay on your mortgage will be slightly higher than with a regular deal.

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Open 7 days a week, mornings and evenings.

We understand that everyone has a busy personal and work life. That's why we're available to work around a time that's convenient to you.

Everyone who gets in touch is entitled to a free mortgage appointment.

We only ask for payment when we find you a suitable mortgage.

You'll be assigned your own devoted case manager.

You will be dealing with the same person throughout the entire process.

Customers are the heart of this company, and we will do what's right for you.

We're here to guide and support you throughout the entire process. To make sure you are on the property ladder with affordable housing costs.

Insuring and protecting your future. We work beyond the mortgage!

We will try to find a suitable insurance product that coincides with your personal and financial situation.

We search 1000's of deals.

We utilise our panel of lenders to find you the most suitable mortgage for your circumstances, with affordable rates.

We know the market inside and out, which makes us experienced and knowledgeable.

We like building strong relationships with customers. We try our best to provide a stress-free, simple service for you.

We'll help you overcome hurdles.

As a first time buyer who is looking to get on to the property ladder under the shared ownership scheme, we'll guide you and support you, all throughout your mortgage process.

Popular Situations with Shared Ownership Mortgages

Getting a shared ownership mortgage with bad credit.

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It is possible to get a shared ownership with bad credit, what bad credit you have registered against you and when it was will determine which lender will be best for you.

Bad credit examples include, county court judgements, defaults, missed payments, debt management plans, and individual voluntary agreements.

If you are concerned about your credit score, it’s always best to start with getting an up-to-date copy of your credit report so we know what we are looking at.  Lending criteria surrounding bad credit is driven by the value of the bad credit, when it was registered, and whether it’s now settled.

Self-employed shared ownership mortgage

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Getting a shared ownership mortgage can be more difficult if you are self-employed due to the additional income checks by the lender. A self-employed applicant will pay the same interest rate an employed applicant on their mortgage, there is no difference here.

If you are self-employed and wanting a shared ownership mortgage then the first place to start is to log in to the HMRC government gateway and download your proof of earnings for the last 3 years, or less if you’re newly self employed.

These documents can then be used in conjunction with any PAYE earnings you receive and your company accounts to assess your income.

Your mortgage broker will require these documents to calculate how much you can borrow and how much your monthly repayments will be.

If you use an accountant, they will be able to provide these documents also.

Shared ownership mortgages age 50+?

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Nowadays, there are lots of mortgage options for the over 50s.  We’re all working longer, living longer, and having our children live with us for longer therefore the demand for mortgages for the over 50s has increased significantly.

The lenders have reacted to the demand with some brilliant mortgage products designed to help the over 50s get on the property ladder or move home.

Shared ownership is a great way for the over 50s to get on the ladder due to the lower deposit that is required.  Also, you’re not forced to buy any additional share in the property in the future if you’re happy paying the rent.

Our later life mortgage team will be able to talk you through your mortgage options and recommend the best way forward for your needs.  There are also some shared ownerships designed at older buyers also which you may wish to consider.

100% shared ownership mortgages

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95% Shared ownership mortgages are the maximum available in the market, 100% deals are not available with shared ownership.

The good news is that the 5% deposit that is required is calculated from the share you plan to buy and not the full price of the property.

Shared Ownership mortgage with CCJ

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Getting a shared ownership mortgage with a CCJ can be more difficult, however, it is possible to help in most situations.

We find that more than ever our clients finances are more complex and getting a CCJ doesn’t have to hold you back with a shared ownership property.

Whether you are able to get a shared ownership mortgage with a CCJ will depend on how much it was for, how many you have registered, the date/s, and whether or not it/they are now showing as settled on your credit report.

With the help of specialist bad credit mortgage advice, you increase your chances of being accepted for a shared ownership mortgage with a CCJ.

We search 1000s of shared ownership mortgage deals

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Registered Address: 10 Consort Court, Hull, HU9 1PU.

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