First time buyer shared ownership mortgages
With government plans to help first time buyers get on the shared ownership first time buyer ladder, the future looks good for potential borrowers wanting to get ont he property ladder through the government led shared ownership mortgages.
- Access to the whole mortgage market
- Shared ownership for first time buyers
- No deposit required - ideal for first time buyers
- Government backed schemes
- Exclusive deals not available on the high street
Shared ownership mortgages have been an ideal way for first time buyers to get on the property ladder for many years, with the governments new plans to increase support to get people on the property ladder, they look set to become more popular than ever!
What is a shared ownership mortgage?
Put simply, a shared ownership mortgage allows potential borrowers to part buy their home and are seen as an ideal way for first time buyers to get on the property ladder - you obtain a mortgage for a portion of the property value through a specialist shared ownership mortgage lender which you repay as normal, and you rent the remainder of the property, typically through a housing association.
There are shared ownership deals for anything from 25% to 75%, where the percentage shown represents the amount of the property to be mortgaged!
An example on a property worth £160,000
If you obtain a 50% shared ownership mortgage, you would get a mortgage on 50% of the property value and pay rent to the housing association on the remaining 50%:
Property value £160,000
Mortgaged £80,000
Rented £80,000
As you rent the remaining 50% of the property there is no deposit to put down, making them very first time buyers as no lump sum deposit is required.
In real terms, the total amount paid each month will be similar to borrowing the full £160,000 but, you will pay part mortgage, part rent, meaning you don't need a huge deposit in order to afford your new home.
