First Time Buyer Shared Ownership Mortgage

Can You Get A First Time Buyer Shared Ownership Mortgage?

Most people can get a First time buyer shared ownership mortgage. As long as you have enough deposit and income and can afford the monthly costs. You also can’t have an income over £80,000 (£90,000 in London) You could argue that the shared ownership scheme is set up with First Time Buyers in mind. As you can use the scheme with a low deposit or low income. It really is a gateway to the property ladder.

When considering Shared Ownership as a First Time Buyer you will get financially assessed by the housing association. You can then decide if you would rather go with your own mortgage advisor.

First Time Buyer Shared Ownership Mortgage Staircasing

Staircasing is when you buy a bigger share of the property as time goes on. Ultimately you probably want to own more of the property over time if you are buying a shared ownership property. Staircasing is an integral part of getting all of your home. It’s important to speak to the Housing Association when applying to see if you can staircase the mortgage over time.

First Time Buyer Shared Ownership Mortgage, How It Works

You only pay the mortgage on the share of the property that you buy, and you pay rent on the rest. You may also pay a service charge. When you first look at Shared ownership you will usually get asked to go through financial assessment. This is to check you meet the affordability and criteria for a Shared Ownership mortgage. If approved you can then either use the Advisor that has completed your financial assessment, or use your own advisor or lender.

You can speak to your Bank if you would like, they may not be the best deal available for you though. That is the main benefit to using the Advisor doing the financial assessment or your own Mortgage Advisor. They will have access to more lenders and products that those limited to just your Bank.

Get in touch to speak with a specialist mortgage advisor about the shared ownership scheme.

95 Percent Shared Ownership Mortgage for First Time Buyers

You can usually get a shared ownership mortgage with as little as 5% deposit as a first time buyer. And your deposit will be on your share. So if you are buying a 25% share of a £300,000 property, your share will only be £75,000 you’d only need £3,750 potentially. This is why Shared ownership is perfect if you have a low deposit or low income.

First Time Buyer Shared Ownership Mortgages For Bad Credit

If you have Bad Credit you may struggle to get any mortgage. However a Shared Ownership mortgage may be really difficult. Depending on what your bad credit is, how long ago it was and what it was for you may have options. The first thing you should do is check your credit report. We recommend Checkmyfile for this as they will show you your report with the top 3 credit referencing agencies. Speak to your Bank or to a specialist mortgage advisor to find out more.

Types Of First Time Buyer Shared Ownership Mortgage

There are many different types of mortgages, however these are the most common.

Fixed Rate Mortgage

Fixed rate mortgages are the most common. A fixed rate mortgage is usually set at a certain rate for a certain amount of time. This therefore means that your monthly payments will be the same for a set amount of time. These are probably the most popular types of mortgage as it allows you to plan your monthly outgoings. They also usually have something called an Early Repayment Charge (ERC) that you have to pay if you try and leave the mortgage during the fixed rate period.

Tracker Rate Mortgage

This type of mortgage usually tracks the Bank of England base rate, and will go up or down accordingly. Sometimes this type of mortgage has a collar or cap so that the rate can’t go below or above a set interest rate. This type of mortgage often doesn’t have an Early Redemption Charge, making them more flexible.

Discount Rate Mortgages

Discount rate mortgages are similar to Tracker rate mortgages. They offer you a discount on the lenders Variable rate. This therefore means that as the lenders variable rate goes up or down so does your monthly payment. This is obviously good when mortgage variable rates are low, but if they creep up you could pay more.

How Do I Check My Credit File?

There are several credit reference agencies you can use. We recommend Checkmyfile as it will show you your credit file with the 3 largest and most commonly used credit agencies. Knowing all about your credit report can help you when discussing your case with a Bank or Mortgage Advisor.

Would Help to Buy be a better fit?

If you have a larger deposit and want to buy a New Build anyway, the Help to Buy Scheme may be a better fit for you. If you have a 5% deposit on the full value of the property you could consider this scheme. You put a 5% deposit down, and get a 20% equity loan (40% in London) from the government. This therefore allows you to get a 75% mortgage, so lower monthly payments usually, and a lower monthly interest rate. You should consider this when thinking about getting on the property ladder.

If we haven’t answered your question here, we might have in our main article here. If not, get in touch with us.