Shared Ownership Mortgages

Shared Ownership Mortgages



Shared Ownership Mortgages
Introduction
Shared ownership mortgages were formed to​ help people buy the​ property of​ their own,​ when they cannot afford to​ buy full property at​ a​ time. the​ share of​ property is​ usually 50%,​ but may also be 25% or​ 75%,​ and is​ purchased from housing associations. Thus you​ own a​ certain shares of​ property and pay rent on​ the​ remaining part of​ the​ property. you​ will not be asked to​ share the​ property with someone else and may mortgages and rent for the​ property.
Demands for shared properties are growing continuously and there are limited vacant properties and even if​ you​ meet the​ criteria for shared ownership,​ you​ may be asked to​ wait for some time. Once you​ have become a​ shared owner,​ you​ are bound to​ pay all utility bills and taxes and your responsibilities include that of​ a​ full owner. Most of​ the​ housing associations provide you​ the​ opportunity to​ purchase share and become a​ full owner as​ and when you​ can afford to​ buy the​ shares.

Social Landlords
Social landlords are nonprofit organizations such as​ housing associations or​ housing societies. These social landlords provide home for rent and sale to​ those people,​ who cannot afford to​ buy.
Shared Ownership Lease
If you​ buy a​ property as​ a​ shared owner,​ you​ enter into a​ contract with the​ social landlord. the​ contract is​ a​ legal document,​ which provides you​ a​ lease usually for 99 years. you​ occupy the​ house and your responsibilities include that of​ a​ full house owner. Social landlord further provides you​ the​ opportunity to​ purchase full shares as​ per the​ certain clause provided in​ the​ contract. as​ it​ involves legal documentation,​ you​ are advised to​ legal help before entering into contract.
Houses offered for shared ownership
Renovated houses and flats are generally offered for shared ownership. Sometimes a​ few new houses may also be offered. Prices of​ these houses or​ flats are generally below than the​ prices of​ properties available sale in​ the​ market in​ the​ same area.
Shared Ownership Mortgages

The amount of​ share,​ you​ purchased for a​ shared ownership is​ mortgaged,​ which you​ will have to​ arrange and the​ rent for remaining part of​ the​ house will be deposited with the​ social landlords.
Mortgage Selection
Before selecting any of​ the​ mortgage option,​ you​ should see your financial health and repayment capabilities. you​ will also have to​ pay service charges,​ charges for utilities,​ and other taxes. on​ the​ basis of​ all your financial capabilities,​ you​ should select a​ share 25%,​ 50% or​ 75% of​ the​ property. the​ benefit of​ higher share will allow to​ pay less rent for the​ remaining part of​ the​ property. the​ common part of​ mortgage includes fixed rate mortgage and adjustable rate mortgage.
In fixed rate mortgage,​ the​ interest rate remains same for throughout the​ mortgage periods. Some mortgage may be as​ high as​ for 30 years and some may be lower periods. the​ benefits of​ fixed types of​ mortgage are that you​ can plan in​ advance the​ amount to​ be paid.
In adjustable rate mortgage,​ interest rate generally starts lower than the​ fixed rate mortgage and may vary once or​ twice during the​ year as​ these rates are linked to​ a​ financial index. Depending on​ financial index Treasury Security Index for United States the​ rates may be either low or​ high. as​ the​ initial amount in​ these rates is​ always lower than the​ fixed rate mortgages,​ a​ more mortgage loan can be secured for the​ same burden.




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