Shared equity mortgages help borrowers not able to afford to purchase all of a home. For those that don’t mind not owning a house outright they can take on a partner and give a stake of the equity in exchange for lower monthly payments.
There are a number of avenues you can explore for a shared equity mortgage. If you have a family member that can offer you help, you could go for a family shared equity mortgage. A parent or someone else in your family would take equity in your property allowing you to take on a smaller mortgage with affordable repayments. This type of scheme, personally I think is better as family normally love to be able to help their sons and daughters and as a bonus can benefit from any increase in house price.
You could also approach your local housing association. Many offer shared ownership schemes. It is a combination of renting and buying in that the housing association takes an equity stake in the property to again assist you with the purchase of the property.
The latest scheme for those residents in Scotland is the LIFT mortgage scheme. LIFT stands for Low Cost Initiative for First-Time Buyers. The Scottish Government administers the scheme with applicants applying through assigned social landlords. In Edinburgh Link Homes is the appointed social landlord.
You apply for funds through a social landlord to help with the purchase of a home. You do need to be on a low or moderately low income to be successful in gaining funding. This type of the shared equity mortgages would see the Scottish Government take an equity stake in the property. There are conditions, you do need to be the majority stakeholder but you hold full title deeds whatever equity stake is taken.
Although the Scottish Government is a stakeholder you will probably feel the home is yours as they won’t interfere like a family member may do should you want to redecorate, change house designs, renovate a room or have a family dispute. You do need to consult the government should you wish to take on a lodger but apart. All fees associated with the house purchase will have to be met by you, normal things like, legal and valuation fees and mortgage repayments, payment of utility bills and repairs. If you want to add an extension the whole cost does have to be met by you.
