SHARED OWNERSHIP
Stepping into your new home is one of the best and most exciting achievements in your life and Shared Ownership makes that ambition possible.
You initially purchase a part share in a home through a mortgage and savings. You only need to buy as much as you can afford, usually a minimum of 35%* and up to a maximum of 75%, and you pay a subsidised rent to us on the share that you don’t own.
The great thing about Shared Ownership is that you can buy a larger share of the property whenever you can afford it. The more you own, the less rent you pay. What’s more, you can get started with a smaller deposit, because it’s calculated on the value of the share you buy. Shared Ownership provides you with the perfect opportunity to get your feet onto the property ladder. Even though you are only purchasing a share, it will definitely feel like your home since you are free to decorate and personalise it to your own taste.
Shared Ownership is a government backed initiative. Below we’ve listed some of the main qualifying criteria around your eligibility:
• Your household income is £80,000 a year or less
• You cannot afford all the deposit and mortgage payments for a home that meets your needs
• You’re a first-time buyer or
• You used to own a home, but cannot afford to buy one now or
• You own a home and want to move but cannot afford a new home suitable for your needs or
• You’re forming a new household – for example, after a relationship breakdown or
• You’re an existing shared owner and want to move
Steps to Reserving your Shared Ownership Home.
1. Affordability Assessment
We work with a financial advisor called Metro Finance, who will carry out an affordability assessment to work out the suitable share that you can purchase. Please contact them on 0114 270 1444 for your assessment.
This process will involve completing a budget planner to determine the suitable share based on your circumstances and affordability, and ensures that we can offer you the maximum share you can afford, without over stretching you. This is a free service, and Metro Finance will also be able to help you to secure a mortgage in principle if you wish.
2. Documents
Metro Finance are responsible for collecting the following documents on behalf of Fabric Living
• Photographic ID (current, in-date passport or driving licence for all applicants).
• Your last 3 months’ payslips (if self-employed, you will need to provide 2 years of accounts by a qualified accountant or 2 years of SA302s, if the mortgage lender will accept these). Please note if your income is from a different source such as pension or disability benefit, we require proof of your annual income.
• A mortgage in principle. This proposes the amount the provider is prepared to lend, the interest rate and the number of years to repay.
• Proof of funds for a deposit (bank statements are usually sufficient). Please note if your deposit is being gifted, the person gifting the funds will need to complete an ID verification check and provide bank statements to evidence the source of the funds. If your deposit is coming from the sale of a property, additional evidence will be required, including a mortgage redemption statement (if applicable), memorandum of sale from your estate agent, and a guide timescale for completion of the sale from your solicitor.
• Proof of current address (utility bill, council tax bill or bank statement).
• Any additional income (Universal Credit, Personal Independence Payment (PIP) etc. Please note that some types of benefit income cannot be used when calculating affordability, for example the housing element of Universal Credit.
3. Affordability Sign Off
Once Metro Finance have received all the required documentation, they will review the documents and if all in order they will confirm a sign off.
4. Payment & Reservation
Once Fabric Living are happy that all information has been supplied and you have received Metro Finance sign off, the reservation can be made. You will receive more information about the property from us and instructions on how to pay the £500 reservation fee to secure your chosen property.
In order to keep things fair and transparent Fabric Living offer a first-come, first-serve policy which is based on Metro Finance sign off. Customers who are signed off first will be given priority.
Once you have paid the reservation fee, reservation documents will be sent to you to sign and return. These documents will confirm the sales details and terms & conditions of the reservation period, so check it thoroughly before signing. You also need to provide your solicitor’s details at this point.
Metro Finance have a panel of recommended solicitors, who are all familiar with the Shared Ownership sales process. Using one of the panel solicitors could help the sale progress as smoothly and quickly as possible.
At the point of reservation, you will need to complete a customer information form, which will be emailed to you by one of the Sales Advisors.
5. Mortgage in Principle/ Mortgage offers
When discussing your mortgage options with a bank/building society/mortgage broker of your choice please note the following requirements:
• We will only accept mortgage offers with a minimum 5% deposit
• The mortgage offer term should not be more than 35 years unless there are exceptional circumstances
• The amount borrowed should not exceed the value of the share being purchased minus any deposit
• The mortgage must not offer further borrowing without the Housing Associations consent or include terms and conditions which are liable to adversely affect the security of the Housing Association
• Interest only and self-certified mortgages will not be accepted.
• We will pay particular attention to any mortgage rate that is 2% above the average rate for the closest equivalent mortgage (considering loan to value, length of fixed rate term) of five mainstream shared ownership lenders (e.g., Leeds, Halifax, Nationwide, Santander, Barclays)
