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Advice for Shared Ownership of a Property
I'm thinking ahead to when my current tenancy on the flat I'm renting expires next summer, and following the advice of so many friends, family and internet strangers (hello!) I've decided that my next move will be to buy my own place from next year. I'm looking specifically at new-builds - don't ask why, but I just have an irrational dislike of moving into a residence that someone else has lived in for God knows how many years.
There aren't a lot of new build developments in my preferred area at the minute, and many of those that are, are being sold under "shared ownership" agreements. Thing is, I have a basic grasp of what this means, but as I've only researched it from the estate agents' perspective, I was wondering if anyone else can give me the wisdom of their experience as to whether it's in fact a good idea.
Also, on a different topic, when it comes to deposits, is it better to put down a larger deposit and therefore have a smaller mortgage, or will the bank just hike up the interest rate so I would end up paying more anyway?
Ta very much in advance.
There aren't a lot of new build developments in my preferred area at the minute, and many of those that are, are being sold under "shared ownership" agreements. Thing is, I have a basic grasp of what this means, but as I've only researched it from the estate agents' perspective, I was wondering if anyone else can give me the wisdom of their experience as to whether it's in fact a good idea.
Also, on a different topic, when it comes to deposits, is it better to put down a larger deposit and therefore have a smaller mortgage, or will the bank just hike up the interest rate so I would end up paying more anyway?
Ta very much in advance.
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Back in the day we purchased (by a mortgage) 68% of the property, as that was what was recommended with regard to my income and I rented the other 32%.
The mortgage and rent can fluctuate over time of course and so 5 years later and due to the house prices rapidly increasing in the late 80's the value of the property rose to the point that the 32% was more than the original 68%. This was still not a problem as by that time our wages had increased to cover anything extra.
I would agree OP it is nice having a new, up to date house to move into as then you know that the plumbing/wiring/windows etc are all brand new.
A larger deposit is a better option as the interest due on the loan is more than the interest you would have made by saving it.
But........you will still need some cash to equip your new home so it's swings and roundabouts there.
That was the only way we could afford a mortgage and the only way out of the rental market.
Roll on 20 years later and my income increase meant I could buy the other half out. House is now worth at least 130k, maybe 140.
I think its the best way for 1st time buyers with house prices being extortionate.
I would suggest paying as much deposit as you can afford, then buy the rest as and when you are able in the future.
Everything inside the property is out responsibility so we have to replace and mend stuff as it goes wrong, everything out side the flat we pay a service charge on and with vandalism now the cost is rising to levels we are struggling to afford.
I don't recommend it unless you know you can buy further shares and eventually move because it can become a trap.