Exploring Remortgage Shared Ownership
Shared ownership is a popular option for those looking to buy a home but cannot afford the entire property on their own. It is a scheme where a buyer purchases a portion of the property and rents the remainder from the housing association. Remortgaging is an option for those who have already bought a shared ownership property, allowing them to change their mortgage provider or product, or increase their share of the property. In this article, we will explore the options for remortgaging shared ownership and the pros and cons of doing so.
Understanding Shared Ownership and Remortgaging
Shared ownership is a scheme designed to help first-time buyers get on the property ladder, or those who cannot afford to buy a home on their own. The buyer purchases a share of the property, usually between 25% and 75%, and rents the remaining share from the housing association. The buyer also pays a service charge to the housing association for the upkeep of the communal areas.
Remortgaging is the process of switching your mortgage provider or product, or increasing your share of the property. It can be a good option for those who want to reduce their monthly mortgage repayments, or those who want to increase their share in the property. However, it is important to consider the pros and cons of remortgaging shared ownership before making a decision.
Pros and Cons of Remortgaging Shared Ownership
One of the main advantages of remortgaging shared ownership is the potential to save money on monthly mortgage repayments. If you can find a better mortgage deal with a lower interest rate, you could save hundreds or even thousands of pounds over the term of your mortgage.
However, there are some downsides to remortgaging shared ownership. If you want to increase your share of the property, you may need to pay for a new valuation and legal fees, which can be expensive. You may also need to pay an administration fee to the housing association. Additionally, if you are in the early stages of your mortgage term, you may face early repayment charges from your current lender.
Tips for Choosing the Right Remortgage Option
Before remortgaging shared ownership, it is important to consider your options carefully. Look at the current interest rates and mortgage deals available, and compare them to your existing mortgage. You should also factor in any additional costs, such as valuation fees and legal fees.
It is also important to speak to your housing association and check the terms of your lease. Some housing associations have restrictions on remortgaging, and you may need their permission before you can proceed.
Finally, seek professional advice from a mortgage broker or financial advisor. They can help you navigate the complicated process of remortgaging shared ownership and help you find the best deal for your circumstances.
Remortgaging shared ownership can be a good option for those looking to reduce their monthly mortgage repayments or increase their share of the property. However, it is important to consider the pros and cons and seek professional advice before making a decision. With careful consideration and research, you can find the right remortgage option to suit your needs.