first home buy... what is this??

bluechair84

Have a perousal here.

You can apparently buy a percentage of the house which reduces your rent. Now, I assume this is a great idea as it means that at least some of the outgoings actually go into savings (house asset) instead of someone else's pocket. Is that right? And what is this called?

Yesterday was the first time I'd looked at mortgages and err... let's say I could have done with a bottle of whiskey...

Cheers

Koiler

i think its called shared ownership. you own a percentage of the house, and the rest is owned by a housing association or the property developer. you pay your mortgage (which would be far less then a 'whole' morgage as it would only be for say, 25% of the property) and pay rent to the other party. i think you have the option to buy an increased percentage of the house.

probably best to speak to an estate agent in your area

Briggo

Thats one of the government backed schemes where you need to apply and only those in low income positions or on the council waiting list can qualify for it.

Similar to council houses, its based on a points system and if you dont qualify you can't have.

I'd look into the finer details a lot more as its not as clear cut of first time buyers get it automatically and you dont want to apply and get turned down straight away, schemes vary from each other.

There are some private firms that offer something similar where you purchase say 75% of the house and then in 5-10 years purchase the other 25% off them (obviously paying the 25% portional rent) for first time buyers.

bluechair84

Thanks for that - shared ownership is what I needed to be able to find out more.

Looks like a pretty good system from what I can see; I can buy as much as I can afford to pay in mortgage meaning a considerable amount of what I am currently spending on rent would actually go into the property, which I would see back upon sale or purchase of the house. Just depends on how easy it is to sell the house given that I don't own all of it.

Though I have just seen that it is for people struggling to get on the housing ladder (which seems like it would be anyone getting onto the housing ladder tbh). Need to check eligability.

bluechair84

Briggo wrote:

Thats one of the government backed schemes where you need to apply and only those in low income positions or on the council waiting list can qualify for it.

Similar to council houses, its based on a points system and if you dont qualify you can't have.

I'd look into the finer details a lot more as its not as clear cut of first time buyers get it automatically and you dont want to apply and get turned down straight away, schemes vary from each other.

There are some private firms that offer something similar where you purchase say 75% of the house and then in 5-10 years purchase the other 25% off them (obviously paying the 25% portional rent) for first time buyers.

Thanks, I've found the Homes and Communities Agency website (though who the hell they are I've yet to figure) - just hunting for eligibility guidance. We are a teacher and a department technician so our total income isn't big.

Edit - think I've found it; household income of £60,000 is the limit. So we could be three teachers and just qualify :shock:


So final thing - does anyone know if this is a good idea? Money is new to me. The financial world is just starting to kick me in the teeth.

welshkev

a guy i works with does it, his house is worth around £180,000. he pays £150p.m mortgage and £299 a month rent. obviously he only owns a percentage of the house (i'm not sure how much)

where as my house is worth about £110,000 and i pay £605 p.m mortgage, so it is cheaper, but you obviously don't own the house outright at the end of it

bluechair84

Would he recommened it do you think? I've found plenty of stories online where the agency has upped the rent to extortionate values and upon selling, the agency has undervalued the house.
But, I'll also be chatting to an advisor soon so I'm sure he'll make some recommendations for me.

Cheers

welshkev

i'm not sure, he's not here now to ask, he's lived there for about 4 years and i don't think he's had any problems. but i bet there's small print somewhere saying that the rent is fixed for a certain number of yeras etc

see what the professional advisor says and then decide

bluechair84

Aye, thanks. My biggy really was I didn't know what it was called so was struggling to find anything out about it.
Question answered, but if anyone has any experience on these mortgage schemes i'd be interested in.