Help-To-Buy Shared Ownership

Help to Buy: Shared Ownership mortgage.

 

The Government Help to Buy schemes can help many get on the property ladder who otherwise may not have the means to afford a mortgage on a house. If you’re after a Help to Buy: Shared Ownership mortgage then there are some pros and cons you need to take into account.

Take a look to see if this Help to Buy scheme could be for you, and if you have any questions get in touch with us. At TW Mortgages we give free mortgage advice and are with you every step of the way to ensure your property purchase is as stress-free as possible!

What is a Help to Buy: Shared Ownership mortgage?

 

If you aren’t able to afford the mortgage on 100% of a home, you can take advantage of the Help to Buy: Shared Ownership scheme and purchase a share of your home, which will range between 25% and 75% of the property’s value. 

You would then pay rent on the remaining share which keeps costs affordable. In the future, you will be able to purchase larger shares of the property if you’re able to afford to do so, but bear in mind that the buying of the additional shares will depend on the property value at that time… it could go up. And of course, it could go down!

What will a Help to Buy: Shared Ownership mortgage cost me?

 

If you have your eye on a house that is worth £200,000 under shared ownership and you buy a 25% share, the remaining 75% will be owned by a housing association. Let’s break the finances down...

The housing association share: £150,000

Your share: £50,000

Your deposit: It must be 5% of the value of your share, so in this scenario = £2,500

Mortgage required: £47,500


Your rent will be based on the percentage that you own. The rent on the shares you do not own will be subsidised.

Remember: If you’re wishing to use the Help to Buy: Shared Ownership mortgage, then you must factor in the additional costs beyond your 5% deposit. We offer free mortgage advice, but you will need to also cover the costs of solicitors’ fees, any moving costs, potential stamp duty etc.

Who is eligible for a Help to Buy: Shared Ownership mortgage?

 

This scheme is available only in England and there are certain factors that come into play to qualify for this mortgage:

  • You must be a first-time buyer, used to own your own property but can no longer afford to buy one now or you’re an existing shared owner looking to move.

  • Your household earns £80,000 a year or less (£90,000 or less for those who live in London).

There are other circumstances which could affect your Help to Buy: Shared Ownership mortgage such as:

  • Military personnel priority through government funded shared ownership schemes

  • People with long-term disabilities can get help with purchasing a property through Home Ownership for People with Long-Term Disabilities (HOLD) - terms apply.

  • Older People’s Shared Ownership: This scheme assists those aged 55 or over. This works similarly to the general Shared Ownership scheme but you can only buy 75% of the shares of your home. However, once you own that portion, you won’t have to pay rent on the remains.

What can I buy with a Help to Buy: Shared Ownership mortgage?

 

You will need to take out a mortgage to pay for your share of the home’s purchase price or fund through your own savings. And when it comes to selecting a property, bear this in mind:

  • You won’t be able to have free reign on selecting the properties you want to put an offer on. 

  • You can buy a newly built home or an existing one through resale programmes from housing associations. 

  • And any properties available on this scheme will always be leasehold. 

It can be overwhelming trying to figure out which government scheme is the right one for you, so get in touch and we’ll happily discuss your needs and provide free mortgage advice.