Do you want to have your own home, but cannot afford it? Then why not try shared ownership. Sharing doesn’t mean that you will share your home with someone else you will just buy a share of property (about 50 per cent) from a housing association and pay rent for the remainder. Then you can increase your share until you own the whole property.
So you should select mortgage that is not only suitable to your type of purchase, but also one that fits in with your financial position. The most straightforward way of repaying your loan is repayment mortgages. Total repayment usually takes up to 25 years.
Variable rate mortgages offer interest rates that will vary according to the base rate set by the Bank of England. If base rates vary i.e. rise or fall, the lender will generally alter their lending rates accordingly.
You will need to approach your local Department for Work and Pensions office (DWP) in case you are on income support. As a rule lender doesn’t approve mortgage without confirmation from the DWP that the repayments will be met.
If you apply for a shared ownership mortgage lender would want to know:
- What share you are looking to buy in the property (e.g. 25%, 40%)
- Deposit size.
- Rent you will be paying on the share you do not own.
When applying for this type of mortgage you can ask for Shareded Ownership Scheme that will help you to make a choice.
