THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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A shared ownership mortgage is a great way for people to get on the housing ladder if they cannot afford to take on the whole burden of repayments themselves.
These types of agreement work by allowing you to take a mortgage on only part of the house. A third party - usually a local council or housing association - buys the rest. Generally, your share can be anywhere from 25 to 75 per cent of the total value of the house. As well as the mortgage repayment on your part of the loan, you will pay rent on the remaining share.
As such, shared ownership mortgages can be particularly beneficial to first time buyers, those on a low income, people who want to buy a home as an individual rather than with a partner, or people whose current level of income is not guaranteed.
These schemes also allow people to buy a home in an area where they might not be able to afford to otherwise.
There is usually an option to increase your mortgage at a set time in order to buy the other stake holder out of their share. The idea is that by this stage you may have progressed in your earnings and can then afford the full repayment. This is known as a stepped option.
Some lenders offer 100 per cent loan-to-value ratios on your share of the property, meaning you won't have to pay a deposit.
You'll need to check with the local authorities in your area to see what schemes are currently on offer.
Click here to read more about shared ownership and other home buying assistance schemes in our handy guide.
Gov.uk - The government website's 'Owning and renting property' page features information on a range of issues including buying and selling property, property regulations and taxes, and mortgage aid schemes.
HMRC - HM Revenue & Custom's Stamp Duty page tells you everything you need to know about the tax including reliefs, exemptions, payments and penalties.
Council of Mortgage Lenders (CML) - The CML's consumer information pages feature a host of information on buying a property and choosing and managing a mortgage.
Citizens Advice Bureau - Citizens Advice Bureau's 'mortgage problems' section offers help and advice to people who are having trouble keeping up with their mortgage repayments.
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