Ownership / Home Buy
A shared ownership agreement is an arrangement in which you buy a home with another person/entity or people at the same time. Probably the most common form of shared ownership involves the purchasing of a property with a local authority or housing association. This allows you to buy a percentage of your home and pay rent on the remainder, very often with the option of increasing your shared interest as and when you can afford it, commonly known as 'staircasing'. Many of these homes are new-builds, with initial shares starting from around 25%, and the eventual option of acquiring 100% of the property. (Different housing associations and local authorities have different criteria detailing who can participate in shared-ownership schemes and under what circumstances).
Family Loan
A family loan is where a parent, guardian or family member lends you money or takes out a loan to help with the equity element of purchasing. For example, a parent could use a home - equity loan on their primary residence to borrow money and lend the funds to you. You can then make the repaymenty on behalf of the parent, guardian or family member. When using a family loan, it is important to ensure that everything is in writing preferably using solicitors so that (a) the loan amount is not taxed as a gift and (b) \all parties are fully aware and briefed on what they are signing up to.
Piggyback Loan
This involves financing 80 percent of the property purchase with a regular mortgage loan whilst financing the remaining 20 percent with a separate loan. Naturally the biggest drawback with these loans is you have to keep up with two loan repayments, but it can work!
First Time Home Buyer Programs
The rising cost of housing over the past decade has made it difficult for first-time buyers to get on the property ladder. However, some mortgages are specifically designed to assist first time buyers and you can even get help with the down payment. First time home buyer grants are offered by some non-profit organisations.
Buying at Auction
If you are considering buying a property you will need to follow a number of steps including finding a lender and mortgage within your price range and seeking professional advice (e.g. legal, surveyor and estate agent). Buying a property at auction should be broadly similar except you are obliged to exchange legally binding contracts on the day and you will thus have had to arrange your funding prior to the auction and sought legal and surveying advice prior. In addition, it is helpful to;
• Get on local auctioneers' mailing lists.
• Attend a few auctions as a spectator before considering buying at an auction.
• Check with the auction house for details about the ways to bid.
Further information can be found on http://www.home.co.uk/guides/buying/auction_steps.htm
To find out about single or joint mortgages contact our recommended mortgage brokers First Action Finance on
0207 580 7770 or visit their website www.firstaf.com