|
Home / Finance / Mortgage
100% Shared Ownership Mortgages
By:Joe Kocsis
As UK house prices have escalated out of the reach of the first time buyer many people have had to resort to moving into rented accommodation to get a roof over their heads. An Englishman's home is his castle and with the average UK mortgage now being in excess of £100,000, it is now an extremely expensive commodity and the dream of owning your home is looking bleak for the first time buyer.
The truth is that house prices have outstripped incomes and as a result affordability has become a big, big problem. All is not lost, so, what are the alternatives and how could you become that homeowner?
Let us look at some alternatives that could be considered: -
* Shared ownership
* Parent guarantee schemes
* Buying with friends
* Shared equity schemes
Shared Ownership
If you are unable to buy a property outright on the open market, then shared ownership is the ideal solution for you. Shared Ownership is a part buy, part rent scheme, which enables purchasers to buy a home in stages. Purchasers can buy an initial share between 25% and 75% of the value of the property and pay a subsidised rent on the remaining value of the property. Shared ownership properties can be provided by housing associations, housing trusts and local authorities. These organisations try be as flexible as possible with regards to the initial share purchased, but this may be as much as 50% of the market value at some of their developments.
A service charge will normally be payable to cover the cost of communal maintenance. The service charges payable can remain the same whatever percentage you own of your home and continues to be payable should you purchase your home outright where possible. You will need to have sufficient savings to cover the initial cost of home ownership: legal fees and stamp duty for example. You will need to be able to meet the costs of rent, mortgage, service charges and other associated outgoings.
As your income increases, you can buy further shares of your home until you could own 100% of the value and no longer share the ownership with the housing association or trust. The greater the percentage you own, the lower the percentage on which you pay rent. However, if you do not wish to buy more shares in the property, you do not have to. Obviously, the more you own, the less you pay in rent. And, if you can buy your home outright in the future, then no rent will be payable.
Having found the shared ownership house of your dreams a good whole of market mortgage broker should then be employed to find the best and cheapest mortgage. Careful searches can reveal 100% shared ownership mortgages that will not require a deposit, even if you have an adverse credit history.
Finding the right mortgage is a very important financial decision in life as it is more often than not the largest single expenditure in people's lives! People will often search the supermarkets shelves for bargains choosing products for the sake of a 1p or 2p saving per item and there's nothing wrong with that; I do it all the time.
Our parents teach us to be frugal with money in our up bringing and we sometimes become animals of habit throughout our lives. Through the generations, inflation has seen prices increase ten fold and who would have thought years ago that the price of a loaf would touch the £1 figure.
The same can be said about UK property, as the housing market has exploded and the average mortgage has gone way above the £100,000 figure. This is before we align our currency and interest rate with the euro. Ireland has seen a massive explosion in property prices in the post years of joining the euro and it is now an extremely expensive place to buy property.
Consider this as a normal mathematical comparison. A 2% saving on a £100,000 mortgage works out at £2,000 per year and assuming that this saving can be made every year by remortgaging and moving the mortgage to another lender, it equates to an astronomical £50,000 saving over the normal mortgage term of 25 years. It just doesn't make sense to be putting an extra £40 per week into a lenders pockets when they already make billions of £££'s net profit per year.
Most of us have all experienced hard times at some stage in our lives and received letters from banks telling us that they are going to charge us £27 for bouncing a cheque or non payment of a direct debit or standing order. Now is the time to hit back and take some of that money back from them by taking advantage of the discounts that they have to offer to borrowers.
So, if there is massive saving around like that, why do people not remortgage more often?
Surveys conducted by lenders have identified that some people are just not aware, whilst others have said that they just could not be bothered. Some people have stated that the mortgage market is just too complicated.
Well, the range of UK mortgages has increased dramatically over the past few years. Although this increase in mortgage types has added complexity, it has also introduced fierce competition, which has in turn resulted in the availability of some very attractive mortgage products for the customer. With over 10,000 mortgage products to choose from, how do we ensure that we get the best mortgage and remortgage rates?
Employing the services of a whole of market mortgage broker (the equivalent of a supermarket) can pay dividends here, as they have sophisticated computer software to narrow down the best rates for buying with friends, equity share mortgages, parent guarantee schemes and 100% shared ownership mortgages.
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: 100.shared, ownership, mortgages, self, certification
Article Source: http://www.articles2k.com
The author is the Managing Director of Professional Mortgage Connections Limited, who are whole of market mortgage brokers. Follow this link www.mortgages2.co.uk for further information.
|
|
| Top Mortgage Articles |
|
|
- 2). Mortgage Refinancing Below 500 FICO By : Tristan Hunt
If you have been turned down for a mortgage refinance, especially a cash out or debt consolidation refinance, because your lender says your credit score is under 500, there are a variety of new options and strategies available which can help you get the cash you need now to pay off your credit card debts, collection accounts, and other derogatory or poor credit accounts and improve your FICO credit score to the point where you can qualify for a low interest, fixed rate loan.
|
- 3). Mortgage & Refinance Tips: Determining Your Income By : Tristan Hunt
When you apply for a refinance, debt consolidation or purchase mortgage, one of the most important factors in qualifying for the loan is your income. That may not seem like much of a surprise, but you may be surprised at all of the different ways your income can be calculated based on how well you can document it, and how much this can affect your loan process.
|
- 4). Mortgage Terms and Definitions By : Dan Lewis
The mortgage process can be a little confusing if you aren't familiar with the terms used in the process. To help you out, here is a list of terms with corresponding mortgage definitions.
Broker: An independent mortgage professional that oversees the entire home loan process.
Lender: The business entity providing and funding the home loan.
Processor: Prepares your loan for underwriting.
|
- 5). Is Your Subprime Mortgage Lender A Predatory Lender By :
Subprime lenders offer financing for people with low credit scores who don’t qualify for a conventional loan. Subprime financing can be offered through traditional mortgage lenders like banks, credit unions, or mortgage lenders. There are also specialized lenders who only deal with subprime mortgages.
Predatory lenders charge high fees, write loans in vague terms, and structure payments so they can foreclose on property.
|
- 6). Make the Most of Your Mortgage Leads By : Jay
If you are a loan officer or mortgage broker and you invest in mortgage leads, or you are considering investing in mortgage leads, make sure you are making the most of them.
A lead provider, if they are a good one, can provide you with a good quality lead, the rest is up to you.
The lead provider has no control over what the potential customer might say.
|
- 7). Fha Mortgage Loans - The Benefits Of An FHA Mortgage By : Carrie Reeder
The Federal Housing Administration (FHA) insures mortgages to allow low to moderate income families to purchase their own home. With government backing, families can buy a home at a lower initial cost. However, there are limitations with this program.
Mortgage Insurance – Section 203(b)
The FHA provides mortgage insurance, not mortgage loans to families.
|
- 8). Use A Mortgage Calculator To Guide Your Home Equity Loan Decision By : Gerald Mason
The difference between a home loan and a home equity loan lies mainly in that the home equity loan, also known as a second or even third mortgage, is issued at a higher interest rate. This interest rate is lower than you could expect to pay on a credit card, but it will be still higher than the original interest rate.
Use a home equity mortgage calculator to see what releasing different percentages of your equity makes to the payments required.
|
- 9). Fixed Rate Mortgage Loans - Understanding The Basics By : Carrie Reeder
Fixed rate mortgages are the most common type of mortgage loan for home buyers. With predictable payments, long term homeowners can plan their budgets and guard against rising interest rates. But a fixed rate mortgage is not for everyone with its higher interest rates and a reduction in your buying power.
Fixed Rate Mortgage Features
A fixed rate mortgage features set rates, long term low monthly payments, and low risk.
|
|
|
| New Mortgage Articles |
|
|
- 2). Deciding on Whether a Reverse Mortgage is For You By : Search For Classes
Many seniors want to enjoy their golden years, but are unable to find a way to increase their monthly income or decrease enough of their monthly expenditures in order to retire at an age that will afford them the opportunity to do so. One way to circumvent this problem is through obtaining a reverse mortgage. A reverse mortgage enables homeowners older than sixty two years of age to convert the equity in their homes into tax-free income while they continue to reside at their property.
|
- 3). The Basics of Reverse Mortgages By : Search For Classes
Reverse mortgages are loans against your home that require no repayment for as long as you live there. As opposed to regular mortgage loans, reverse mortgages have no income requirements and are based solely on the equity of your home or condo. There are no monthly payments to make as the mortgage is due only when the borrower is no longer living at the residence.
|
|
|
- 5). Remortgages: The Helps and Hazards By : James Smiths
When you remortgage you home you, just as the name you imply, get a new mortgage that replaces the existing one. This is usually something that takes place when the market interest rates drop down below what you are paying. Most often this is something that is considered by homeowners who hold fixed rate mortgages.
The Helps
Remortgaging can be helpful in quite a few different ways.
|
- 6). Buying To Let: Is It For You? By : James Smiths
If you read the title of this article and thought to yourself, "Let what? What am I letting happen buy buying? And what am I buying?", than this article is definitely for you. First let me establish that the "buy" refers to a house and second, the "let" part, that refers to renting that house out to someone else. Basically it means that you buy a house and let someone else pay the mortgage and live in it.
|
- 7). Mortgage and their debts By : devi
Purchasing a house has been a vision for many. But it is impossible for an average man to possess a huge sum of ready cash to procure the property; the only remedy here is, going for mortgages. Mortgage can be defined as a loan which will provide monetary help to purchase any real estate property. The borrower can make his payments regularly to the lender.
|
- 8). UK mortgage and remortgage deals By : Groshan Fabiola
Mortgage is a way of securing a debt by using your own property as a guarantee to the lender. If For some reason you cannot pay your debt in time you may lose the property. The term mortgage itself refers to the debt and also to the legal device used when securing the property.
In the countries where properties are highly demanded and the prices are quite elevated, there are strong loan and mortgage markets.
|
- 9). Getting the right mortgage By : john
Selecting a mortgage can be a difficult task. First of all, you need to decide which mortgage would suit your needs best.
For those who want to know what their monthly outgoings are going to be, should look at a fixed rate mortgage, as these are mortgages that are set at a fixed price for a certain period, which can be anything from 1 year to 5 years.
|
- 10). Cheap Mortgage Rate By : Danny Wirken
Must-Ask Questions When You Get Your Mortgage
Whether you're buying a house or refinancing, there is more to a mortgage than the rate. Here are eight questions to ask while mortgage shopping. You'll have to ask yourself some of these questions; others can only be answered by mortgage professionals and insurers.
How long do I plan to stay in the house?
That's often a hard question to answer.
|
|
|
