How does shared ownership work?
Asked on Nov 8 2010,
General in Barnsley |
You might buy a 25%, 50% or 75% share in your home. You pay a rent on the share that you don't buy normally set at an 'affordable' rate of, say, 3%. The bigger the share that you purchase, the less rent you have to pay. When you can afford to do so, you can buy more shares until you own your home outright in a process known as 'staircasing'.
Answered on Nov 8 2010,
The other answer is correct, it is a scheme designed to assist in the purchase of property. The idea is you buy a specified percentage of the property and pay a proportional rent on the outstanding balance with a view over time of securing the freehold.
Answered on Nov 9 2010,
The two previous replies are correct, but a word of warning - check the small print on your agreement, because it often states that when you come to sell the property, the finance company`s share of the selling price has to be the market valuation that the finance company agrees with.
This means that if you need to drop the price to sell quickly, the finance company may not agree to drop the price of their share.
This can delay the sale or it may mean you are the only one taking the drop in price.
Remember at selling time, you may have pressures forcing you to want a relatively quick sale, but the finance company can wait indefinately to get the asking price that it wants.
It`s just a point to consider before going into the agreement.
Answered on Mar 2 2011,
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