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Shared Ownership Mortgages – a beginner’s guide
Purchasing a home in the UK is the one of the largest purchase you’re likely to make but before you arrange your mortgage, you should ensure you know what you can afford to borrow and also make sure you find out you can afford a shared ownership mortgage, and also know how the process works.
What is a mortgage?
A mortgage refers to a loan taken out to buy property or land and most of them run for 25 years but the term can either be shorter or longer. The loan is usually secured against the value of the property until it is paid off. However, If the individual cannot keep up their repayments, the lender can take back the home and sell it so they get their money back.
Working out what you can afford
There are several Mortgage Affordability calculator available online that one can use to work out how much they can afford. If you feel you will have difficulties with keepingup repayments, do not overburden yourself. Also, consider the running costs of owning a home which include maintenance. Household bills, council tax, and insurance.Usually, lenders request for proof of income from the individual as well as certain expenditure, and also find out if you the individual has any debts.
Most of them ask for information about child maintenance, household bills, and personal expenses. They simply want evidence that the individual will be able to keep up repayments if interest rates rise and they may decline to offer a mortgage to the person if they don’t think they will be able to afford it.
Where to get a shared ownership mortgage
People can apply for a mortgage directly from a bank or building society, and choose from their product range. They can as well use a mortgage broker or independent Mortgage Brokers (IMB) who can help them compare different mortgages in the market.
Some brokers view mortgages from the ‘whole market’ while others do so from a number of lenders and they will pass the available information to the person seeking for loan. They also add their charges the first time you contact them.
It is advisable to take advice from those who are very experienced in financial matters in general, and mortgages in particular. Some people prefer to choose a mortgage without receiving advice and this is called an execution-only mortgage and are usually are offered under limited circumstances.
Below are the lists of things you are expected to know while looking for a shared ownership mortgage.
First, you have to know what type of shared ownership property you want to purchase as well as the amount you want to borrow and for how long you intend to. Also, the type of interest rate and type of interest rate at which you want to borrow.The lender will write to confirm that you haven’t received any advice and that the mortgage hasn’t been assessed to see if it’s suitable for you.
In some cases you might be required to confirm that you know the consequences of taking out a mortgage without receiving advice and also give your consent to go on with it. If in the future the mortgage turns out to be unfavorable to you, it will be very hard for you to make a complaint.If you decide to use the execution-only route, the lender will still carry out some affordability checks of your finances and also assess your ability to make repayments in certain circumstances.[/vc_column_text][/vc_column][/vc_row][vc_row el_class=”seo-link-sec hide”][vc_column][vc_empty_space height=”50px”][vc_column_text][slick-slider category=”28″ design=”design-5″ speed=”2000″][/vc_column_text][/vc_column][/vc_row][vc_row el_class=”call-out-sec stretch-sec” css=”.vc_custom_1568018042545{background: rgba(0,0,0,0.88) url(https://imbonline.co.uk/wp-content/uploads/2018/07/counter-wrapper.jpg?id=1382) !important;background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;*background-color: rgb(0,0,0) !important;}”][vc_column][vc_column_text]
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