For The Time Being At Least, A Shared Mortgage Seems The Easiest Option For First Time Buyers

For The Time Being At Least, A Shared Mortgage Seems The Easiest Option For First Time Buyers

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Getting on the property ladder can be tough. This is especially true if you are on a low income or if you are a first time buyer. That is why many people have been looking for imaginative and innovative ways to buy their new home.

An increasingly popular choice for low income and single people is to buy through shared ownership. The other party in the deal tends to be a housing association or company which will buy out half of the property, so you only need to get a mortgage on the other half.

These types of mortgages have greatly increased in popularity in recent years as it has become very difficult for first time buyers to get on the property ladder unless they have a large deposit available to them, so there are plenty of great deals available out there if you shop around.

As well as making the repayments to your mortgage, you will also typically have to pay rent to the association that owns the other part of the property. This makes owning the other part of the property worthwhile for the housing association or company. The rent is typically quite low, however, as the point of shared ownership is that it is aimed at you if you are not a high earner or cannot afford a mortgage for the total property value.

One thing that everyone during a recession is trying to limit is risk. Shared ownership mortgages help with this because they are less risky; half of the property has already been bought out. Lenders are keener on allowing higher loan to value, which means they are more likely to lend a borrower a higher percentage of the property's value.

It is possible to purchase your property incrementally through a 'staircase' option. This option means that you can purchase more of the property from the housing association later on. Check with your scheme provider if this option is available as it is not standard in all deals, but well worth taking up if it is

Unless you have a large deposit available, it can be tough to buy a property in the current market. So, it is no surprise that shared ownership schemes have grown in popularity over recent years. And, there are some good deals in the market if you are prepared to research what is available.

Finding shared ownership deals can sometimes be tricky and so speaking to a qualified mortgage broker or financial advisor may be advisable. Brokers have a good knowledge of the mortgage market and may be able to find several shared ownership deals for you. However, bear in mind that you may have to pay a fee for their services.

As ever, it is not as perfect as they are always made out to be. Under the mortgage agreement you would have to gain the permission of the housing association to make any alterations or improvements to the house. This could be anything from an extension, to a conservatory or even just a simple redecoration of a room.

If a large deposit is beyond your means or you simply do not want to wait another decade to get on the ladder, then a shared ownership scheme could help you as it has helped many others make that first step. Consider it an investment at the same time as you will benefit from any increase in the property's value, helping you then make the next step up the property ladder.

About the Author:
Howard writes for Just Commercial Mortgages the UK's No1 site for the latest commercial mortgage rates and commercial property finance news.



Article Originally Published On: http://www.articlesnatch.com


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