This step-by-step guide to on how to apply for a shared ownership home will cover everything you will come across when using the shared ownership scheme.
If you're considering buying a home through shared ownership as a way into the property market, or if you're simply curious about how the process works, this article is a must-read.
Shared ownership is a scheme that allows you to buy a share of your home, usually between 25% and 75%, and pay rent on the remaining share owned by the housing association. This scheme provides an affordable route onto the property ladder, especially for first-time buyers who cannot afford to buy a property outright.
- You don't need as much money upfront, making it easier to get started
- You can get yourself a bigger home than you might otherwise afford
- You have the option to buy more of your home over time until it's all yours
- Your monthly costs could be lower compared to renting from a private landlord
Remember to check you are eligible for shared ownership so that you know you are eligible to buy through the scheme.
Step 1 - Work out how much you can afford
If you are looking to buy a shared ownership home, it's important to determine if you can afford to buy the property and cover the monthly payments. Our website has a handy calculator you can use to estimate what your repayments would be based on the share you purchase, the property price, interest rate, and loan term. This will give you a good idea of the monthly amount to budget for when you take out a mortgage.
However, it's important to remember that the mortgage payment is not the only cost involved when you buy a home with shared ownership. You will As a shared owner, you might also be responsible for a service charge to the housing association.
Factor these costs associated with buying into your budget as well:
Reservation deposit to reserve the home. This will be deduced from the purchase price.
A mortgage evaluation to check if the property is worth the price of the property.
An arrangement fee - The lender may charge a fee for arranging your mortgage.
Solicitor fees for all the legal aspects of buying a property.
Deposit amount, which is usually around 5-20% of the share of the property.
You'll want to inspect your current household income and expenses and make sure you have enough left over each month to cover the mortgage payment and these other ownership costs.
Don't forget to leave yourself some wiggle room in your budget for unexpected repairs or changes in expenses.
Remember your monthly costs of buying as well which could include:
Rent and service charge payment
Energy bills will usually be lower with a new build property compared to an older property. Bills with vary depending how many bedrooms the property has.
Owning a home as a first time buyer through shared ownership can be an affordable way to get on the property ladder. But make sure you go into it with a full understanding of all the costs involved. Use our mortgage calculator as a starting point, but take the time to do a thorough analysis of your complete financial situation.
Step 2 - Find a home that you want to buy
Finding a home involves searching for eligible properties on property portals or contacting housing providers directly. Keep in mind that some schemes may only be applicable to new build properties or specific resale homes.
Things to consider when finding a home you want to buy:
- Can you afford the property?
- Do you want a house or apartment?
- What number of bedrooms do you need and in the future?
- Do you know the share percentage that you can afford?
- Do you want a new build or resale?
- What does the property need to have? (garden, garage, parking, en-suite, balcony etc)
- Is the area suitable for your needs? (local amenities, schools, work, shops etc)
- What are the transport links like?
Guinness Homes aims to make it as seamless as possible to find a home. All of our current property listings are conveniently available to browse on our website. You can filter and search for homes based on location, price, size, property type and more to pinpoint options that fit your needs and budget.
Each listing contains detailed information and photos to give you a good overview of the home without having to visit in person first. Check back often as new shared ownership properties are frequently added once they become available.
The other great feature we offer is email notifications. You can sign up on our site to receive alerts whenever a new property is listed in your desired area. This way you’ll be among the first to know about the latest developments we have available and be the first to buy the home.
With all listings available online and email updates on new listings, you can conduct your home search entirely on your own schedule. Browse at your convenience before arranging viewings.
Our sales team is always available to help and answer questions you have!
Step 3 - Register or apply for shared ownership
The next step is to register and complete a shared ownership application on our website. This allows us to fully evaluate if you meet the requirements.
The application will request personal details like your name, contact information, employment status, annual income, and current debts. We'll need this financial information to analyse your income-to-debt ratio and ensure you'll be able to manage the mortgage and rent payments comfortably.
We will also check your credit history. Providing complete details is important, as it informs the pre-approval process.
Our sales team will quickly review your application and determine your eligibility for the property. We aim to make this process smooth and set you up for success in your new home.
Please reach out if you have questions while completing the online application form.
Step 4 - Make a mortgage appointment
You will also need to contact a specialist shared ownership mortgage broker or an independent financial advisor. They can guide you on how much of a share you can purchase and how much you will need to take out. You'll need to apply once you receive the mortgage offer, you can reserve the home for a fixed period by paying a reservation fee.
You can make an appointment with one of the brokers we've got listed on our site. They know a lot about shared ownership and they will help you find a mortgage that fits your money situation and what you need. They understand the housing market and changes in lending rules, so they can offer you options from different lenders based on your circumstances.
Even if your credit score isn't great, you're a self-employed, or there are other things that make getting a mortgage harder, these brokers can use their know-how and contacts to find the right solution for you.
Keep in mind, brokers are there to make things easier for you. They take the time to get to know what you need and they will show you the best options. They'll sort out all the paperwork and chat with lenders for you, which makes everything less of a headache for you.
Step 5 - Complete a reservation agreement and pay a deposit
This step is vital in the home-buying process. It involves two key actions: completing a reservation agreement and paying your deposit. Here's what each action entails:
The reservation agreement is a document that confirms your intention to purchase the property. It outlines the terms and conditions of the sale, including the price, the property details, and any conditions that must be met before the sale can go ahead. It's important to read this agreement carefully and make sure you understand everything it contains. If there's anything you're unsure about, it's a good idea to seek advice from a legal professional.
Once the reservation agreement is signed and in place, it's time to pay your deposit. This deposit will be counted towards the total cost of your new home. It's typically a percentage of the purchase price and serves as a demonstration of your commitment to buying the property.
Remember, paying a deposit secures the property for you, preventing other potential buyers from purchasing it. Therefore, it's crucial to have your finances in order before this stage.
Keep in mind that once you pay your deposit, it might be non-refundable if you decide to pull out of the purchase, depending on the terms of the agreement. Always ensure you're fully committed to buying the property before you sign any documents or pay any money.
In terms of the property you're buying, you'll also need to understand the terms of the shared ownership lease. This will include details about buying more shares in your home in the future, improving and selling your current home, and more.
This step is a significant milestone in the home-buying process. It signifies an important shift from simply being interested in a property to making a formal commitment to purchase it.
Step 6 - Choose a solicitor
When considering buying a home, having an independent professional legal advisor by your side is important. They bear the responsibility to navigate through any complications that might arise during the legal processes and safeguard your interests.
Shared ownership involves particular legal aspects that may not be present in standard property purchases, such as lease agreements with the housing association. An expert solicitor can ensure everything is completed correctly, reducing any uncertainties you might have and making certain your rights are protected throughout.
Selecting one can seem daunting. Therefore, we've prepared an list of reliable solicitors on our website to facilitate this task for you.
Remember, they will play a pivotal role in taking care of all the legal paperwork, from drafting contracts to liaising with sellers or housing associations on your behalf and ensuring everything is legitimate.
Not only will they provide reassurance but also potentially save valuable time and money through their informed guidance throughout this significant life event - purchasing a shared ownership home.
Step 7 - Moving into your shared ownership home
This involves picking a date for you to move into your new home. We'll ask you to agree on this date, making sure it's a good day for you.
Once we've made sure all the legal stuff is sorted and you're happy with the move-in date, we'll organise a meet-up at your new place. This is when we'll give you the keys to your new home.
This could involve a few steps:
Checking Availability: Discuss and agree upon a suitable moving date with all involved parties. This might include the seller (if it's a purchase), your landlord (if you're currently renting), or any moving services you might be utilising.
Final Inspection: Depending on the terms of your agreement, you may also wish to arrange a inspection of the property before you move in. This allows you to ensure that everything is in the agreed condition, and that any required repairs or alterations have been made.
Confirming the Date: Once a date has been agreed upon, you can formally confirm it with all involved parties. You should ensure that this date is feasible for your moving service providers, utility companies for switch over, etc.
Key Handover: On the decided moving in date, you will meet with the relevant party at your new home. They will hand you the keys, officially marking your move into the new place. Ensure that all sets of keys are handed over to you - including those for any outbuildings, mailboxes, or windows, if applicable.
Moving in: After receiving the keys, you can begin moving into your new home. Be sure to check everything thoroughly - from utilities functioning properly to ensuring that the property hasn't sustained any damage in the interim.
Remember, it's important to keep constant communication with your solicitor throughout this process. They can provide legal advice and help ensure that everything goes smoothly on your big day.
So, in simple terms, once all the legal bits are done, we'll set a date that suits you to move in. We'll meet up and give you your new keys. It's as simple as that!
In summary, buying a home involves several steps from understanding eligibility, finding a suitable property, securing finance, and understanding legal obligations. It's advisable to seek advice from housing providers, financial advisors and mortgage lenders during this process.