Will a shared ownership property mortgage be right for me?

27 March 2015

Despite the United Kingdom’s (UK) apparent emergence from the economic mire following the financial crash of 2008 and the subsequent burst of what is commonly termed a ‘property bubble’ it can still be very difficult to get yourself on the property ladder.

This is especially the case for younger people and first-time buyers because they are less likely to have the necessary capital in order to put down a deposit on a property. Once upon a time mortgages were available where you could pay for the property 100% through mortgage payments; the best you’re looking at these days would be around 95% (but that would have consequences regarding interest!).

This doesn’t mean that younger people and first-time buyers are incapable of getting on the property ladder. Instead, it just means that you have to be more creative in order to do so. The best way of doing this is to explore all the options available to you. Consider shared ownership mortgages, for example.

Shared ownership is a system through which you purchase a share of your home (probably between 25% and 75% for the majority of people) and it is operated by a housing association. There are a number of eligibility criteria which means that the scheme can be very useful for first-time or young buyers. One of these requirements is that your household earns less than £60,000 per year which could be a perfect fit for a young professional couple to really extrapolate the most from the scheme.

In London, this limit of £60,000 is raised to £66,000. There is an official Mayor of London site  that can prove very useful to anyone within the capital looking to benefit from this scheme.

Remember the importance of finding information about mortgages from a building society who are subject to the doctrines of the Financial Services Authority (FSA) and are obliged to give you accurate information that has gone through strict processes before it can be presented to the public.

Due to the amount of variety there is when it comes to deciding which mortgage to get, you need ensure you collect as much information as you can from the proper authorities. With different schemes such as Help to Buy being offered as well as variable or fixed rate mortgages – it is worth looking into.

However, what the shared ownership scheme really offers is a freedom to own your own home that would otherwise be denied to prospective buyers that haven’t had time to raise the necessary capital for a large investment in a deposit. This is why it can prove so useful to first-time buyers and the younger generation hoping to own property for the first time.

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