However, Shared Ownership is not always a cheap option for consumers.
The extent to which shared ownership is more cost-effective than owning a property, with a mortgage, is dependent on the rental outgoing charged by the housing association.
In the United Kingdom, particularly in the south of England, rental outgoings are increasingly exceeding mortgage costs for properties of equal value.
In addition, many borrowers suffer from a misconception that shared ownership will result in lower mortgage interest rates than other ownership options.
They believe this because of the thought that their mortgage loan will be a small percentage of the property’s valuation.
As Loan-To-Value (LTV) is the primary driver of interest rates (the lower LTV, the lower the interest rate), this misconception is understandable.
However, for Shared Ownership cases, the value element of LTV is based on the purchaser’s share price as opposed to the entire property value.
Therefore, the interest rates available to a shared ownership purchaser may be higher than initially expected.
Contact Us
For further information on Shared Ownership mortgages, please contact our advisers.
Simply click the ‘Contact Us’ button and submit an enquiry form.
Our advisers will then arrange a free consultation with you to discuss your specific requirements.
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