Shared Ownership Mortgage Advice in Derby

Shared ownership remortgages involve increasing your ownership share in a property that was initially purchased through the shared ownership scheme. In shared ownership, you co-own the property with a housing association, enabling you to enter the property market with a lower deposit requirement compared to buying outright.

Refinancing a shared ownership mortgage can help you achieve various goals, such as increasing your ownership percentage, securing a better loan deal, or adjusting your financial arrangement.

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Refinancing a shared ownership mortgage can help you achieve various goals, such as increasing your ownership percentage, securing a better loan deal, or adjusting your financial arrangement.

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Understanding the Shared Ownership Scheme Shared ownership doesn't mean sharing your living space with others; rather, it refers to co-owning a property with a housing association. This government-backed scheme allows eligible buyers to acquire a portion of a leasehold property instead of the entire property's market value. Since you're only financing the share you're purchasing, the initial deposit required is significantly lower than for an outright purchase.

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The Initial Purchase and Rent Payments

Your initial ownership share can range from 10% to 75% of the property's value. The remainder is owned by a housing association or local council, to which you pay rent. Over time, you have the option to increase your ownership share through a process called staircasing, ultimately reaching full ownership.

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Staircasing and Shared Ownership Remortgages

Staircasing allows you to gradually increase your ownership share until you own the property outright. As you purchase more shares, your rent payments decrease while your mortgage obligations increase. Upon achieving 100% ownership, you'll no longer pay rent, only the mortgage, service charges, and ground rent.

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New staircasing rules typically permit you to increase your ownership by 1% each year for 15 years from the purchase date. You can fund this process through savings, a further advance from your current lender, or by refinancing your shared ownership home.

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The Shared Ownership Remortgaging Process

1. Consult Your Current Lender: Start by contacting your current lender to request a redemption quote and explore available options. While sticking with the same lender might offer convenience, it's advisable to shop around for better deals.

2. Notify Your Housing Association: Inform your housing association of your intention to remortgage. They must approve the new mortgage to ensure it aligns with their requirements and terms.

3. Property Valuation: Your housing association will likely require a property valuation to assess the value of your ownership share. This valuation helps determine equity and the value of additional shares you wish to purchase.

4. Switch or Stay: If you decide to switch lenders, the process is similar to applying for a new mortgage. Provide documentation, undergo a credit check, and complete paperwork. The remortgage application typically takes four to eight weeks.

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Costs Involved in Shared Ownership Remortgages

 

Shared ownership remortgages entail additional costs due to the limited number of lenders in this specialized market. Expect fees such as valuation fees, lender arrangement fees (for new or existing lenders), administration fees, legal fees, and potentially stamp duty fees if your ownership share exceeds 80%.

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Engaging a specialist mortgage broker experienced in shared ownership remortgages can help you secure the best deal and navigate the process efficiently. For personalized advice and support, contact us at 01332 498 992  or through our online platform.

 

Our advisors are here to assist you in exploring your options and making informed decisions.