Purchasing a property and paying it in full is not always feasible for most buyers. It can be due to a lot of reasons, one is having bad credit. A shared ownership scheme is the answer. This is a homeownership arrangement that might just work out for you. Take a look at this guide to learn more about shared ownership mortgages.

What is a shared ownership scheme?

A shared ownership mortgage makes it possible to purchase just a share of the property and not the full amount. The remaining amount is then covered through rental payment. The owner can gradually increase their share through “staircasing.” And over time, this will lead to full ownership of the property.

Benefits of shared ownership mortgage

A shared ownership mortgage can offer several benefits. It is one of the most possible ways to push through with a seemingly impossible property investment. Take a look here at how a shared ownership mortgage can make your property investment possible.

• Lower Upfront Costs. Shared ownership has a more affordable initial capital. Instead of paying in full, you can buy a share. This lowers the required upfront cost. This means even those with bad credit can purchase a residential property.

• Affordable Terms and Rates. The monthly payments for shared ownership are easier for the buyer. You only have to shell out money for the initial payment. The remaining amount is then paid as monthly rent. These payments are often more affordable compared to the full mortgage payments.

• Staircasing. If you consider shared ownership schemes, you will be eligible for “staircasing.” The more monthly payments you secure, the bigger the share you gain for the property. This approach makes your journey to becoming the owner much easier.

• Property Usage. You can use the property however you like even if you just own a portion of the property shares. Some use this for business purposes. This allows buyers to invest in a property without the need to pay it in full to gain ownership.

• Government Support. Shared ownership schemes are often backed with government assistance. Most of the time the government offers such mortgage plans to first-time property buyers with low income.

Shared ownership scheme: who is eligible?

Requirements for shared ownership mortgages vary depending on housing associations or regions. Anyone can apply for shared ownership. A shared ownership mortgage is most often offered to first-time property buyers. Those with bad credit or low income are given more priority. It is important that you do not own a home to be eligible. If you are a shared owner and you want to move you may also be eligible for this mortgage option.

A shared ownership scheme is a great opportunity for buyers who cannot afford full ownership of a property. As long as you fit the requirements, you are one step towards owning a property. Shared ownership mortgages are very helpful. If you wish to find out if you are eligible, get in touch with housing associations or mortgage lenders.