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Financial
Services > Mortgages
> Shared Property
> How to buy
Set
out below are the steps that you will need to take, to purchase
a shared ownership home.
Step 1
Apply to the Social Landlord who will send you details of the
schemes available and an application pack.
Step 2
If the landlord deems you to be a suitable applicant the next
step is to meet them to discuss your application, view the property
and establish the price. The purchase price is based on an independent
qualified valuer's valuation. If you decide you want to proceed
you will need to agree the size of the share you wish to purchase.
Step 3
The next step is to arrange a mortgage.
If you already have a bank
or building
society you save with, it is best to approach them
first. Should the bank or building society request a copy of the
lease, the landlord can send them one. In some instances the Social
Landlord may be able to help to arrange a mortgage for you.
Step 4
Once you have received a mortgage offer, you will need to give
the name and address of your solicitor/licensed
conveyancer to the Social Landlord. A draft copy
of the lease will then be sent to your solicitor for approval.
He will also carry out local authority searches and investigate
the title of the property. At this time the Social Landlord will
also inform you how much rent and service charge (an amount which
generally goes into a "sinking fund" to cover repairs and maintenance
to the property) you will be expected to pay on the unsold share.
The purchase will then be formally completed.
Your lender will also require you to insure the property against
fire and other damage i.e. buildings
insurance. Some Housing Associations include this
insurance cover in their service charge, this is something you
will need to check. You will, however, need to arrange contents
insurance and it would also be worth considering
life
insurance and payment
protection insurance to ensure that should anything
happen to you or you were to lose your job, your dependents would
receive some income and the mortgage would be paid off.
Step 5
At a future date you may wish to purchase further shares in your
property. You must advise your Social Landlord in writing of your
wish and they will arrange to have the property valued. You will
be responsible for paying the valuer's fee. Once the valuation
has been received, you should be given 3 months in which to arrange
a mortgage and complete the purchase.
An interesting feature of shared ownership is that it can, in
some instances, help you avoid having to pay stamp duty. If the
property you are buying is worth £120,000 or less and you are
providing 50% of the finance, then your share will be below the
level at which stamp duty is charged. If at a later date you increase
or "staircase" your share by multiples of 25%, you will still
avoid paying stamp duty on each occasion, the only time that this
would not be the case is if the property doubled in value.
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