14 June 2017

Posted by Discount Insurance on Wednesday, June 14, 2017
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What’s shared ownership all about?
Shared Ownership is a part-buy, part-rent government-backed scheme which usually allows first-time buyers to purchase a 35-75% share of a new home and pay rent on the remainder. This is great if you’ve found the perfect home but you can’t quite afford to take out a mortgage on the full asking price. You will still need to have saved a small deposit which is usually around 5%.

The process
Imagine the home you want costs £200,000 but you can only borrow a mortgage of £100,000 because of your income and the size of your deposit. Shared Ownership would allow you to buy half of the property and the organisation you’re buying from would own the other half. You would then pay a small monthly rent on the 50% share you don’t own and put forward a deposit from 5%. This leaves a maximum mortgage level of 45% (90,000).

Who can apply?
This scheme supports buyers who would struggle to buy a home on the open market. In order to apply you need to be a first time buyer, in permanent employment, live or work locally, or have family connections to the area you want to buy in. You must also have a total household income of up to £80,000.

Costs involved
As well as a 5% deposit, you’ll need to pay for a reservation fee, mortgage valuation or survey, legal fees and stamp duty. You will also need to factor in the costs of moving home, for example hiring a removal firm.

Discount Insurance offers Homeowners great and comprehensive Home Insurance from a range of leading UK insurers, allowing you to find the right cover to meet your needs. Give us a call on 0800 294 4522 for a quick quote today!