If you’re a first time buyer or looking to start again on the property ladder, you probably think it has never been so hard.
Property prices sky high, deposit levels reflecting this, you may even imagine that it’s really difficult to obtain a mortgage.
So, what do you do – bank of mum and dad? Save forever? Offer yourself as a sacrifice to a mortgage lender?
You might feel confined to renting – forever! Or, there might be another way.
That way, could be Shared Ownership.
Here at Metro Finance we speak to around 1600 people every month looking to buy Shared Ownership properties, so we get to see these happy, relieved, over the moon, Shared Ownership buyers – and to see how much easier it can be for them than for any other type of home purchase.
Take for example a £175,000 home, Shared Ownership allows you to buy shares from 25% upwards. A 25% share would cost £43,750. With deposits starting at 5% – you’d need £2188 for your deposit. Obviously, this reduces the time it takes to save up the deposit.
Shared Ownership shares similarities with ‘Elasticated Jeans’… With a traditional home purchase the price is what it is. Shared Ownership allows the buyer to adjust to fit, stretch and contract until everything fits just right for you, the share size, the term, the deposit all can be adjusted with the end result being the share that suits you. Further down the line the elasticity remains, you keep stretching, pushing that share size up to 100%. Unless of course you feel happy with the original fit!
But, I’ll never get a mortgage, I hear you say….
There’s a common myth, even amongst some mortgage advisers that there are hardly any lenders that do Shared Ownership – and boy is that a myth!
Today, I counted 26 lenders all offering Shared Ownership mortgages, from mainstream lenders like Leeds Building Society, Halifax, Virgin etc, to the smaller ones like Mansfield Building Society and Ipswich Building Society – all lending on houses and flats in any part of the country.
Myth number two – there are not enough 95% lenders. That’s an even bigger myth than the first!
I’ve been doing lots of counting today…. I even had to double count this, there are 14 lenders offering 95% Shared Ownership mortgages. This certainly represents enough choice and enough variation in lender criteria to satisfy Shared Ownership buyers from most ‘walks of life’.
Which brings me to the worry of – ‘it’s really difficult to get a mortgage’
Fake news? Well not quite, the key point here is that mortgage lenders of all types want to lend, otherwise they wouldn’t be offering their products with such expensive marketing campaigns.
You will need to have a steady income, you will need a deposit, you will need a reasonable credit history and you will need to be able to afford the payments – if all if these can be proved, then there is no reason why you shouldn’t be able to obtain a Shared Ownership mortgage. In reality , the regulations and rules that cover mortgages are just ‘common sense’, although sometimes the media suggests otherwise.
Shared Ownership is truly the king of affordable home products, no other product can gain you entry to the property market with a lower deposit – don’t let ‘mortgage myths’ put you off your dream home.
Jon Lord – Managing Director. Metro Finance