It’s not just the rich that can afford to buy a home these days. Shared ownership mortgages are becoming more and more popular, with people looking for cheaper homes than ever before.
What is a shared ownership mortgage? It’s simply two or more people splitting the cost of property between them. This type of mortgage makes it possible for people to buy a property that would normally be out of their price range.
How does it work? The owner(s) take out a mortgage for the percentage of the property that they own. The other party or parties then pay rent to the owner(s) for their share of the property.
What is a shared ownership mortgage and how does it work
When it comes to buying a home, the cost of the property can often be prohibitive. In today’s inflated housing market, it’s becoming increasingly difficult for people to afford their place. This is where shared ownership mortgages come in.
Shared ownership mortgages are simply two or more people splitting the cost of property between them. This type of mortgage makes it possible for people to buy a property that would normally be out of their price range.
The benefits of a shared ownership mortgage
There are many benefits to taking out a shared ownership mortgage. Some of the key benefits include:
- Affordability – This type of mortgage makes it possible for people to buy a property that would normally be out of their price range.
- Flexibility – Shared ownership mortgages offer a high degree of flexibility, which can be beneficial for those who are looking to downsize or move to a new area.
- Shared responsibility – With a shared ownership mortgage, the responsibility for the property is shared between two or more people. This can make it easier to keep up with repayments and maintain the property.
- Tax benefits – Shared ownership mortgages can offer tax benefits for those who are looking to buy a property.
- Security – A shared ownership mortgage can offer security for both the owner and the tenant.
- Peace of mind – With a shared ownership mortgage, you can have peace of mind knowing that you’re not alone in the responsibility of the property.
If you meet the following requirements, you may purchase a home through Help to Buy: Shared Ownership in England:
- Outside of London, if you have a household income of £80,000 or less, or if your family’s income is £90,000 or less in London
- you are a first-time buyer
- If you used to own a home but can’t afford to buy one now or are an existing shared owner looking to sell your property, this might be the best option for you.
You can buy a newly constructed home or an existing one through resale programs from housing associations using Help to Buy: Shared Ownership. To pay for your portion of the property’s purchase price, you’ll need to take out a mortgage or save money. Leasehold properties are always part of shared ownership schemes.
Through government-funded shared ownership programs, only military personnel will be given preference over other groups. However, local housing requirements may give certain councils with their home construction initiatives some priority.
People with disabilities and shared mortgages
If you have a long-term disability and are looking to buy a home on a Shared Ownership basis, Home Ownership for People with Long-Term Disabilities (HOLD) can assist you in purchasing any house for sale. You can only join HOLD if other homeownership plans don’t meet your requirements, such as the need for a ground floor bedroom and wet room.
Older people and shared mortgages
If you’re 55 or older, you may get assistance from another homeownership program called Older People’s Shared Ownership. This system works similarly to the standard Shared Ownership plan, but you can only purchase a maximum of 75% of your property. You won’t have to pay rent on the remaining share after you own 75% of the property.
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