Since its introduction back in the 1970s, the shared ownership scheme has become incredibly popular. The scheme has seen some changes along the way, the latest coming into effect in April 2021. Today it remains one of the most popular options for affordably buying a home.
If you are interested in purchasing a property using the shared ownership scheme, then there is a process you will need to follow. In this article, we will outline this process; from who to initially contact, through to collecting the keys and moving in.
Who do I contact to apply for shared ownership?
The first step in applying to be considered for shared ownership is to register with your local Help to Buy agent. To find out how to do this, head to the government’s Help to Buy website. There are different Help to Buy agents for different regions of the country.
To view shared ownership properties available in Milton Keynes, please click here. You can also speak to Paradigm Housing Association or Hightown Housing Association. These are both wonderful housing providers that we work with here at Mortgage Light.
Once you have contacted your Help to Buy agent, they will be able to guide you through the application process and outline how shared ownership works. You’ll also be asked a few questions to assess your eligibility for shared ownership around things such as:
- Where you want to live
- Your income
- Your savings
- A brief discussion around your credit history and any outstanding borrowing you may have
In order to be eligible for the scheme, you must be at least 18 years old. You must have a household income of less than £80,000 a year (£90,000 in London). You must not already own a property and you should be able to obtain suitable mortgage funding.
What financial checks do I need for shared ownership?
Once you have registered, you can begin to look around for a shared ownership property that you’d like to purchase a share of. When you have found a property that you are interested in, you will need to go through a full financial assessment with the relevant Housing Association’s designated financial advisor. They may also run a credit check on you.
From there, they will discuss with you the size of the share of the property that you can afford to purchase. From that, they can calculate the rent payments that you will need to pay for the remaining share of the property. The Housing Association will own this share. Your affordability will need to be assessed for each property that you are interested in, as different properties will often have different rent and service charge rates. This depends upon the type of property and the different Housing Associations administering them. This will affect the monthly cost of ownership for each one.
Once you have been approved by the Housing Association for the property that you’d like to purchase and paid your reservation fee (typically £200, but this can vary), it’s time to find a shared ownership mortgage product. A mortgage advisor and broker that specialises in shared ownership mortgages can help you with this, such as us here at Mortgage Light.
In order to find a suitable shared ownership mortgage, your mortgage advisor and broker will take you through a similar process of financial checks to the ones you did with the Housing Association. They will ask you for:
- 3 months wage slips, along with proof of any commission or bonuses you regularly receive
- 3 months current bank statements
- Proof of ID and proof of address
- Evidence of your deposit money
Once your advisor and broker has found you a suitable mortgage product, they will submit your application to the lender and you must then await your mortgage offer.
The rest of the process is very similar to the process of buying a house with a standard mortgage. A valuation will need to be carried out on the property. You will also need to instruct your solicitor so that the legal work and searches can be carried out.
Once your solicitor is happy and all of their enquiries have been answered, you will receive a contract and mortgage document to sign, along with the full copy of the solicitor’s title investigations and a list of all fixtures and fittings included in the property. You must sign and return these documents and arrange to send the deposit funds to your solicitor.
At this point, it’s time for your solicitor to exchange contracts and fix the date for completion. Upon completion day, you can collect your keys and officially become a homeowner!
Mortgage Light has been helping people with shared ownership mortgages for years and we pride ourselves on our expertise. We’re ready to guide you through the process and help you secure your shared ownership property. Give us a call today on 01908 597655 or contact us here.