First time buyers have been treated unfairly in recent years. They have been encouraged by lenders to borrow more than they can afford, obtaining loans equating to over 5 times their incomes, and the price of starter homes available to them have soared, partly due to the Buy to Let Market investors.
It is about time that First Time Buyers are offered real help in getting on the property ladder; they deserve the opportunity to buy their own home, at a price they can afford without moving miles away from their chosen location.
Shared Ownership Mortgages and properties are one solution. These properties are offered for sale by Housing Associations who act as agents for the Government. Buyers buy a % of the property value, typically 25% to 50%. A shared ownership mortgage is raised for the buyers share and a nominal rent is paid to the Housing Association for the remaining share. The deposit required is typically 10% of the buyers share, for example;
Property Value £200,000
Share purchased 25% (£50,000 mortgage)
Deposit required £5000
Income required approx. £14k - £20k
https://www.clickngomortgages.co.uk/
Thanks to the Shared Ownership Mortgage scheme, low to middle income earners have a real opportunity to purchase their own home. Even in London, where first time buyers have been prevented from buying due to soaring prices, properties are available on a shared ownership basis. This much more attractive option, offering more security than the rental option.
For higher income earners New Build Shared Equity may be the solution. The Government is not involved in the scheme. Builders and Developers offer developments where purchasers again buy a % of the property value, typically 75% - 85%. The Builder retains the remaining share, and lenders do not request a deposit from the purchaser. No rental is payable to the Builder, however the remaining share must be bought from the Builder within 10 years or when the property is sold, whichever is soonest.
The Shared Equity Mortgage has another distinct advantage, because the lenders are only lending maximum 85% of the property value, the interest rates available are much more favourable, typically 1.5% lower than if the purchaser placed 10% deposit on a normal property on the open market.
Not all lenders offer Shared Equity Mortgages and Shared Ownership Mortgages, some lenders offer one type and not the other. It is wise to seek advice from a Mortgage Broker to ensure the mortgage goes through smoothly with a relevant lender.
Of course both the above Shared Ownership Mortgages and the Shared Equity Mortgages are available only for new builds. If you want a property on the open market you have no option but to fund a deposit, currently 15% is realistic and cannot usually be raised as a loan.
If you want to know more about shared ownership & shared equity mortgage schemes, then contact Click n go Mortgages here.
https://www.clickngomortgages.co.uk/
