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A shared ownership mortgage
potentially may be a way to get a person on a lower income
onto the housing ladder as UK house prices are so high and
income multiples do not marry up. The system works by the
borrower taking out a
mortgage
as a percentage of the ownership say typically 50% share and
the local housing association will own the other share. Many
high street lenders may cater for this type of mortgage.
The
housing authority may allow the option to the borrower to
increase the amount of share they own called staircasing so
that they are able to own the home out right.
The
Housing Association may charge rent for the remainder of the
share normally at around 3% to keep the over all costs to
the borrower low. The government have been keen to encourage
this scheme as it is an excellent way to get key workers in
the right locations. The building insurance may be set up
by the the Housing Association.
Some
lenders may take on this type of mortgage with bad credit
or poor credit score and lower than 50% share though these
would be adverse specialist lenders whom will charge a higher
interest rate and have long, high early repayment charges.
They may consider county court judgements (CCJ), defaults,
missed payments, arrears, IVA and bankruptcy. However self
cert is not applicable to shared ownership. Mortgage completion
after the mortgage offer can often be lenghty due the involved
and extra legal work inherent with this type of mortgage.
The
following APR relates to the above products only.
THE OVERALL COST FOR COMPARISON IS :-
8.9%
APR
The actual rate available will depend upon your circumstances
ask for a personalised illustration. |
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