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Shared Ownership Mortgage in the UK


Applying for a Shared ownership mortgage in the UK

This often involves a two-stage process.

The first stage usually involves a basic fact find that helps you calculate how much you can afford, and which type of mortgage you need while the in the second stage the lender conducts a more detailed affordability check, and also request for evidence of income.

Stage 1

Usually in the first stage the, the mortgage broker asks a series of questionsto find out the type of mortgage you want, and for how long you want it. In addition to that, they also try to find out the individual’s financial situation. This provides an indication of how much a lender might be prepared to lend you they also give important information regarding the product, charges and their service.

Stage 2

Your application starts in this stage. In this stage, the mortgage brokerstarts a full ‘fact find’ and a detailed affordability assessment, during which you will need to provide evidence of your income as well as  specific expenditure, and the‘stress tests’ of your finances to ascertain if you would be able to repay the debt now and in the future. This could also involve some detailed questioning of your finances as well as your future plans that could affect your future income. In addition to that, the impact of a rise in the interest rates will have on your repayments will be checked too. After your application has been accepted, the lender will give you with a ‘binding offer’ and a Mortgage illustration document(s) which will explain the terms of your mortgage. This will be accompanied by a ‘reflection period’ of at least 7 days, which will grant you the opportunity to make comparisons and assess the consequences of accepting your lender’s offer. Some lenders may give you more than 7 days for this and you also have the right to waive this reflection period so as to speed up your home purchase if you want to.

During this reflection period, the lender cannot withdraw or change their offer except in some certain circumstances. For example, if it was discovered that the information you provided was false.

You should also note that if you are not satisfied with the advice you receive, you may be able to complain to the Financial Ombudsman Service. Although your mortgage broker is the first port of call, they will need to try to rectify your complaint in the first instance.

The size of your deposit matters

When purchasing a property, you will need to pay a deposit. This is a reasonable amount of money that goes towards the cost of the property you are purchasing and the more deposit you have, the lower your interest rate could be.

When discussing mortgages, you may hear people mentioning “Loan to Value” or LTV. It refers to the amount of your property you own outright, compared to the amount that is secured against a mortgage.The lower the Loan to Value, the lower your interest rate is likely to be and this is because the lender takes less risk with a smaller loan as compared to a bigger loan.People who present with 40% deposit usually have the cheapest rates.[/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( !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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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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