A home of your own SHARED OWNERSHIP (PART BUY/PART RENT)

Transcription

1 A home of your own SHARED OWNERSHIP (PART BUY/PART RENT)

2 Shared Ownership Home ownership is something prior generations took for granted. Now, with rising house prices and rising rents alternative out right home ownership is for many no longer possible. Yet, we believe home ownership should be for everyone, that s why we believe shared ownership is such a great option. The key facts In essence you will own part of your home whilst also paying a small amount of rent on the remaining share part You have the option to buy more of your home from Grainger Trust at any time You can sell the property at any time, just like a normal home owner You can buy as much of the property as you want so your payments suit you and your life Who are Grainger Trust? Grainger Trust is part of Grainger, the UK s largest private residential landlord, with over 100 years experience of owning and managing properties Grainger Trust is a registered provider of housing, delivering housing options for the 21st century Why buy with Grainger Trust? Grainger Trust are part of a new breed of registered providers, we put our customers at the forefront of our business We ensure all our homes are built highest standards by working with an acclaimed team of experts By working with National House builders, Grainger Trust ensures customers obtain a house they are proud to call home at a price they can afford All of our newly built homes come with a National House Building Council (NHBC) warranty or equivalent

3 What is Shared Ownership? Shared Ownership is quite new to the UK. The product is designed to be a stepping stone on to the property ladder by allowing you to buy the home you want but at a price you can afford. By becoming a shared ownership purchaser, you are not a tenant instead, you are an owner occupier. The property is sold to you on a 125 year lease, you will become a leaseholder, whilst we, Grainger Trust, will be the freeholder. Your lease sets out certain conditions such as: How often your rent and service charge goes up How much it will go up by What you should expect from us; and Your rights and responsibilities as owner-occupier You have the right to buy your home outright at any time. If you own a house, you will become a freeholder, the same as a normal home owner if you own an apartment, you will remain a leaseholder. This is due to the apartment being part of a block, the hall way, stairs and corridors will remain in the ownership of Grainger Trust as the freeholder. Grainger Trust work with a panel of qualified and experienced professionals who will be able to help and advise you through the process. Registering with Shared Ownership Agent 01. Reserving your home 02. Identity Check The Offer Financial Interview Appointing a Solicitor Memorandum of Sale Completion! Buying your shared ownership home Now you have found your ideal home, what happens next?

4 Your Step by Step guide to what happens next? Registering with Shared Ownership Agent Shared ownership is aimed at first time buyers who are unable to buy a suitable home in any other way. In order to be eligible for a shared ownership property you must be registered with a shared ownership agent: First Steps if you live in a London borough Help to Buy Agent - Your local agent will be able to help you if you live outside of London In general terms you must satisfy the following criteria to qualify: You have a gross household income of no more than 71,000 per annum when eligible to purchase or rent a one or two bedroom home or no more than 85,000 per annum when eligible to purchase or rent a family sized home (three or more bedrooms) You are unable to purchase a suitable home to meet your housing needs on the open market You do not already own a home or you will have sold your current home before you purchase or rent Applicants will normally be offered a home with up to one bedroom over and above their current needs Applicants need to be at least 18 years old to be able to obtain a mortgage Appropriate checks to ensure that all applicants can afford the purchase and sustain the housing costs We rely on accurate information being supplied by applicants when making allocation decisions. We will withdraw any offer made if information is found to be misleading or incorrect. In the event of a dispute the matter can be referred through Grainger s complaints handling procedure. Reserving your Home Firstly you ll need to make a payment of 500 to reserve your property. You will get your reservation fee back if: You decide you don t want to go ahead before allocation We are unable to offer you a home of your choice; or You buy a home with us (it will be taken off the purchase price) You won t get your reservation fee back if (after we make you an offer): You decide not to go ahead, for whatever reason, including if you change your mind; or We withdraw our offer of a home because you have given false or misleading information on your application form Identity Check Once you have paid your reservation fee, we will verify your identity. In accordance with the UK Money Laundering Regulations. The Offer If the result of the check is satisfactory we ll contact you to make an offer of a home. Or let you know if we are unable to make you an offer.

5 The Interview Appointing a Solicitor Memorandum of Sale Completion If we offer you a home and you accept, You will need to arrange a meeting with an independent mortgage advisor. At the interview the financial advisor will: Check the information on your application form is correct and decide if you can afford to buy Agree the % share that you will purchase based on income, savings and outstanding credit commitments Give you information about choosing a solicitor; and Give you information about choosing the right mortgage for you So that we can help you buy your new home as quickly as possible, all applicants must bring the following to your interview: Your payslips for the last 3 months. (Please bring 3 months worth even if you are paid weekly) or If you are self-employed, your audited accounts for the last two years from a certified or chartered accountant or the last 2 years tax assessments from the Inland Revenue Your passport Last 3 months bank statements (original or a certified copy) Your latest p60 (original or a certified copy) A photocopy of your marriage certificate, if applicable Details of previous surnames if applicable Child benefit book if applicable A recent rent statement or copy of your rent book if you are a council or housing association tenant Proof of residency for all addresses you have lived at for the past 3 years. This can be in the form of utility bills or council tax documentation or bank statements. If you are unable to provide any of this for any addresses, a letter from your bank confirming that correspondence was sent to you at this address will do If you have any hire purchase or personal loans then please bring along with you the original agreement and current statements. This includes statements for credit cards with an outstanding balance Proof of savings If you are receiving a contribution toward your deposit from a family member then you must obtain a letter from them confirming the amount being gifted, as well as proof of these funds being available e.g. a bank statement The mortgage must be with a high street lender, on a shared ownership basis and on the term an share advised by the financial advisor. Everyone who buys a home needs a solicitor to do the necessary legal work. Grainger Trust work with a panel of solicitors who are known for their quality of work, experience of shared ownership sales, prompt and professional nature. We have agreed a set hourly rate with this panel to ensure you get best value for money. After your interview we will issue a Memorandum of Sale (MOS) to all solicitors. This summarises the details of your proposed purchase. During this time your mortgage lender will be preparing your mortgage offer and your solicitor will be progressing the legal paperwork. Early on, a valuer will inspect your new home on behalf of your mortgage lender to make sure it is worth what you are paying for it. Your lender will also be getting references about you from your employer, your bank and your landlord. If you have not received your mortgage offer three weeks after your interview you must let your financial advisor know so that they can chase it up for you. However, our Sales team will move things along for you and they will contact you regularly to make sure everything is going smoothly. Once you receive your mortgage offer you should contact your solicitor straight away to arrange to sign your contract. A deposit equivalent to 10% of the value of your share will be required to be paid to us at exchange of contracts (if you are obtaining a 95% mortgage the requirement will be 5% of the value of your share). Please ensure you transfer this to your solicitor in good time so exchange of contracts is not delayed. On the completion date, your mortgage lender will give your solicitor the money to buy your home. Your solicitor will then pass that money on to our solicitors. Once this is done, we can give you the keys to your new home so you can move in. Your keys will be ready for you to collect from approx 1pm onwards, and our Quality Team, will make arrangements to meet you at your new home and collect your keys. On completion day you will also receive: More information about being a home owner All the instructions for your central heating and other appliances NHBC handbook (or equivalent) We will also take meter readings so that you can pass on readings to your utility suppliers

6 Quick summary of costs: What will I pay each month? Your mortgage payment Your rent payment Purchase of 40% share of 250,000 home ITEM COST NOTES Reservation Fee 500 Mortgage Valuation Fee 400 Subject to mortgage provider rates Mortgage Arrangement Fees 1000 Subject to mortgage provider rates Solicitors Fees 1000 Subject to solicitors fee level Stamp Duty Land Tax 7,500 (3% on 250,000 home) Removal Costs 300 Deposit 10,000 Variable dependent upon value of your home Dependant on value purchased and mortgage conditions Utility Connection Charges 150 Dependant on utility provider TOTAL 20,850 Each month you will pay the following: Your mortgage (on the percentage share of the property you own) Your rent (on the percentage share that Grainger Trust own) Your service charge (if applicable) The mortgage you take out on your home is an agreement between you and the mortgage lenders, subject to any terms and conditions agreed with them. You will be required to make regular payments to the mortgage lender as set out in the agreement. It is your responsibility to ensure these payments are made. What happens if I am unable to pay my mortgage? If you think you may fall behind or you have fallen behind on your payments it is vital you contact your mortgage lender. Most lenders will work with you to find a solution to the problem. If you do not get help, or your financial problems continue and you get into debt, the mortgage lender can repossess your home and repay your mortgage. If this happens you might lose all the money you put into your home, including the interest you have paid up to that point. On the first day of each month you ll pay your rent to us by direct debit. This makes payment simple and convenient for everyone as the payments are taken directly from your bank account. Your rent will go up on April 1st each year by a set amount as agreed in your lease. We ll tell you the amount you will have to pay for your new rent every February/March What happens if I am unable to pay my rent? As the government doesn t give us all the money to build Shared Ownership homes, we have to borrow the rest of the money from banks. Your rent repays these loans so it s important that you pay your rent on time. If you miss a payment, our Financial Services team will contact you. If you continue not to pay your rent, we ll charge you interest, you may have to pay administration costs and, eventually we may take you to court and you could lose your home. If you have difficulties paying your rent and service charge, you should get in touch with our Financial Services team as soon as possible. If you are in genuine financial difficulty, they will do everything they can to help you. They can often arrange payment plans, put you in touch with your local benefit agency, speak to your mortgage lender and put you in touch with a cost free independent qualified debt counsellor.

7 Your service charge Insurance Apartment service charge Everyone who owns their own home through Shared Ownership pays a management and insurance charge each month along with their rent, also known as your service charge. Your service charge is calculated as a monthly rate and covers all of the following: Rent and service charge collection New build defects reporting Property management repairs, management of shared cleaning and gardening contracts Anti-social behaviour support Block decoration programme apartments only Because we own the freehold of your home, we need to make sure your home is adequately insured. We have a block policy which covers all our properties. As we require insurance on so many properties the premium payable is reduced and we can pass these savings on to you. The service charge for apartments covers the following: The cost of all day-to-day and future repairs and maintenance to the outside of the building and all the shared areas. This could be the roof, communal TV aerial, entry phones anything that is used by everyone in the apartment block The cost of cleaning and gardening to shared areas We only charge you what we have to pay out on services. We do not make a profit. We ll send you an estimate of what we will spend each year in February/March. The service charges are checked by independent, professional auditors and we will give you a statement each year showing what we have spent. Repairs saving fund If you buy a newly built apartment, some of the money we collect through the service charge is put into a repairs saving fund. The fund is kept in a separate bank account (which earns interest) and covers the cost of major repairs in the future such as replacing the roof, redecorating shared hallways and so on. Paying for repair costs month-by-month is a good idea so that you ll never have to find a large amount of money to pay for repairs in the future. It will also help you later on if you decide to sell your home, because the new buyer will know that the money is available to cover any major repairs. Each year, you ll receive a statement of this fund. Other charges You will need to organise payment of your own contents insurance, council tax, TV licence, water, electricity and any other utilities that you require e.g. internet, telephone, satellite television. Ground rent Ground rent is usually payable annually on 1st April. The amount you pay will be stated in your lease and is usually 100 per annum rising after 25 years however can vary therefore please check with the sales team or solicitor if you are not sure. Your home is also covered by the National House Builders Council s (NHBC) warranty or equivalent which covers your home for defects in the building workmanship for the first two years after you move in and for structural problems for ten years, in some cases 12 years.

8 Buying a bigger share of your home You then have the choice of buying a bigger share in your home if you want to. This is called staircasing. The price you pay for any extra share is based on the market value of your home at the time you want to buy. This value can go up or down according to house prices generally. The value will be set by an independent valuer. There will be some costs involved in staircasing such as a valuation fee and solicitor s fees, although it shouldn t cost as much as buying your first share. What happens when I want to sell my home? You can sell your home at any time. Under the terms of your lease L&Q has 8 weeks to find a buyer for your home. This helps you as it saves you the expense of going to an estate agent and doing all the hard work yourself. We ll make a set charge for this which should be cheaper than using an estate agent. After the 8 weeks, if we are unable to find a buyer, you can sell your home through an estate agent in the normal way. Like staircasing, the price you sell your home for will be based on the market value at the time. Like any home, the value can rise and fall along with the housing market. You must feel comfortable with the risks of these ups and downs before you decide that Shared ownership is for you. However, the advantages of Shared Ownership are that: You only buy as much as you can afford to start with; and You decide if and when you buy more. Changes have been made to the information that sellers have to provide when they wish to sell their home. Your home is at risk if you fail to keep up payments If you fail to keep up payments on any mortgage, rent or other secured loans, your home is at risk. Please make sure you can afford the repayments before you take out a mortgage. Contact us If you would like more information or to apply for one of our new homes then you can contact us in the following ways: Grainger Trust Limited No.1 London Bridge 3rd Floor East London SE1 9BG Call us on: us on: info@graingerplc.co.uk Or for further information visit: Design & Produced by DS.Emotion

9 A home of your own SHARED OWNERSHIP (PART BUY/PART RENT)