The starter guide for the first time Shared Ownership buyer

Our top tips to get started with your Shared Ownership journey

Buying a new home, especially if you’re a first time buyer, can be a bit of a mind field. We have some top tips to help you feel less stressed and more blessed!

If you’re looking to take out a Shared Ownership mortgage, you’ll need to consider the following:

1. Make sure you check if you can get a mortgage first – not all lenders will advance a mortgage for Shared Ownership and you'll still need to apply for a mortgage to pay for your share of the property.
2. Make sure you can afford the costs of Shared Ownership including stamp duty, moving costs, mortgage fees and insurance.
3. Make sure you have key documents at the ready such as proof of deposit, income statements and a credit rating statement.

Mortgages for Shared Ownership

To purchase a Shared Ownership property, you’ll first need a Shared Ownership mortgage for the proportion of the property you buy and you’ll typically need a 5% deposit.

Not all lenders offer Shared Ownership mortgages, but many do, including Nationwide, Barclays, Leeds Building Society and Halifax. We’d recommend using a mortgage broker with experience of Shared Ownership mortgages as they will typically know the best lenders to approach.

Get key documents ready

Before applying for a mortgage, get a copy of your credit report which is held by credit reference agencies such as Experian or Equifax.

Mortgage lenders will want to see proof of how much you earn, so you’ll likey need a P60 form which you get every year from your employer and shows a summary of your pay and how much tax has been deducted. You’re also expected to be asked for three months’ worth of bank statements and payslips so the lender can look at both how much you have coming in as well as your outgoings.

If you’re self-employed then lenders will want proof that you’ll be able to keep up repayments, so they’ll usually ask to see an SA302 form relating to the last three years from HMRC or your full accounts for the last three years.

You’ll also need a proof of deposit at hand so make sure you get full statements prepared where you have your savings in place. If your deposit is being gifted it is very likely that the gifter/s will need to write a letter expressing how much they’re gifting you. The mortgage lender should have a template letter in place for you to use.

Clean up any debts

If you’re submitting a mortgage application, the last thing any prospective lender is going to want to see is that you owe a load of cash on credit cards or you’ve got outstanding loans.

Before you apply for a mortgage, try to reduce any debts you have – this will help demonstrate that you manage your money responsibly and will mean any mortgage application you make is more likely to succeed. It will also mean you will potentially be able to borrow more when it comes to a lender’s affordability calculations.

Feeling inspired? To see our latest one and two-bedroom apartments in Surbiton, click here.

Author: RHP