www.redwingliving.co.uk T 0344 7360063 Buying your shared ownership home
Buying your shared ownership home Shared ownership is the affordable way to buy a home and is designed to help you step onto the property ladder. With shared ownership, you part buy and part rent a home by purchasing a share in a property and paying a reduced rent on the remaining share. Smaller deposit Buying a share means you ll need a smaller mortgage and deposit than you would if you were buying the property outright. This makes it a more affordable way to own your own home, and is ideal for first time buyers. Shared ownership usually works out less per month than renting a similar property privately, and you can enjoy the benefits of being a home owner rather than a tenant. What does shared ownership mean? You ll buy a share of between 25% and 75% in the property. We ll tell you the minimum share that can be purchased in the property listing on our website. You ll need a mortgage or have savings to cover the price of the share you wish to purchase. You will need to pay your mortgage and rent each month, as well as the usual household outgoings. To help you, we ll carry out an affordability check to make sure you won t be stretching yourself too much financially. Am I eligible? To be eligible for a shared ownership property, you need to be over 18, be a resident in the UK and not own a home already. In addition, your household income should be less than 80,000. Priority is given to serving military personnel and former members of the British Armed Forces who have been honourably discharged in the last two years. Page 2
The buying process Smaller deposit How much can you afford? You can use the mortgage calculator on our website to determine the monthly payments for your new home. Remember, there are other costs involved in owning a home. Move in! When your solicitor is happy that all legal formalities have been completed and your property is ready, we ll arrange a date for you to move into your new home. We ll meet you at the property and hand over the keys. Find your new home All of our available properties are listed on our website. You can also sign upto be notified of new properties in your area of choice. Choose a solicitor You should appoint an independent professional legal advisor to carry out the legal formalities and look after your interests. You can refer to the list of solicitors on our website if you need help choosing. Register for your new home You ll be asked to register and complete an application form online with Homebuy North West and to carry out an affordability check with Metro Finance so we can assess your application in full against the eligibility and affordability criteria. Reserve your new home Once you have your reservation agreement, you will be asked to pay a reservation deposit. The reservation deposit will normally be 500, and will be deducted from the final purchase price. What are the initial costs? Reservation deposit - You will be asked to pay a reservation deposit of 500, which will be deducted from the final purchase price. Mortgage valuation Your lender will arrange to value the home to check that it is worth the price you are paying. This will cost around 500. Mortgage arrangement fee Your mortgage lender may charge you a fee for arranging your mortgage. The cost of this will vary depending on your lender and the length and terms of your mortgage. Solicitor fees Costs for solicitors fees can range from 1000 to 1200. Stamp duty This is a government tax on buying your home, and the rules on stamp duty change from time to time. Your solicitor will advise you of the current rates. Deposit There will be a minimum deposit required by your lender, depending on the value of the home. This is usually between 5% and 20% of the price of the share you are buying. Page 3
What are the ongoing costs? Monthly housing costs there are a number of monthly costs relating to your home that you should take into consideration. These include: Mortgage payment Rent and service charge payment Council tax Water bill Gas bill Electricity bill Home contents insurance. What happens if I miss my mortgage or rent payments? Your mortgage is covered by a contract between you and your bank or building society. If you fall behind with your payments, your bank or building society may take possession of your home and then sell it to get its money back. In addition, if your rent is in arrears your home could also be at risk. What does my service charge cover? Your service charge is payable each month and covers: Cost of repairing and replacing communal lighting Cost of general repairs to communal areas Cleaning communal areas Maintenance and repair of communal door entry systems Gardening and grounds maintenance of communal areas Lift maintenances, servicing and repair including the emergency telephone Management charge and audit fees Buildings insurance Reserve fund for decorations and/or major works. Page 4
Frequently Asked Questions Can I keep a pet? You may be able to keep a pet in your home but you must ask us first. In most circumstances, you are not able to keep a cat or a dog if you share an entrance door or hallway with other people. Your lease often restricts the ownership of livestock (including chickens) and you should consider the impact that having pets may have on neighbouring properties. Who is responsible for repairs and maintenance? If you own a house, you are responsible for all repairs and maintenance to the inside and outside of your home. If you own an apartment, you are responsible for maintaining the inside. We ll take care of day-to-day repairs, maintenance and decoration to the outside of the apartments and to any shared areas. This is paid for through your service charge. Can I buy a bigger share in my home? Once you ve moved into the property, you can buy 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 general house prices at the time. 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. Do I need permission if I want to make any alterations or improvements in my home? You don t need our permission for redecorating and simple repairs, but you will for anything more complicated. Further guidance can be found on our website. Can I sublet my home? Subletting is where you move out and rent the whole of your home to another person or family. Your shared ownership lease does not give you the ability to sublet your home. However, we will consider it under certain circumstances, so please speak to us if this is something you are thinking of doing. What happens when I want to sell my home? You can sell your home at any time. There will be a fee for selling your property. Under the terms of the lease, we will have a certain period of time to find a buyer for your home who meets the affordable homes criteria. If we are unable to find a buyer, you can continue marketing with us or you can sell your home through an estate agent and pay their fees. The buyer must meet the affordable homes requirements. Page 5
Our customer promise Our Promise to You We will: Provide a high quality, customer focussed service Promote our Customer Service Standard so that you know the standard of service you can expect from us Be understanding of your circumstances and treat you fairly and sensitively Provide support and keep you up to date with the progress relating to the purchase of your new home Find out about your circumstances and check that you meet our eligibility criteria Explain why we ask for your personal information and how we will use it and store it Tell you about the main responsibilities which relate to your purchase. Contact We will: Provide a full sales pack, outlining the sales price and the monthly rent payable (if a payment of rent is applicable) Provide a handbook, explaining your responsibilities as a home owner Carry out an accompanied viewing at the properties of interest to you Meet you at your home following legal completion to hand over your keys. Sales process We will: Ask our preferred mortgage advisors, Metro Finance, to call you to discuss your circumstance and to complete a financial assessment. This will take into consideration your income and expenditure to ensure that your new home will be affordable Process your application and let you know the outcome within 10 working days of receiving your completed application form Provide you with an acceptance letter, outlining all the information relating to the sale Let you know the reasons for our decision if we are unable to accept your application Make you aware of all of the associated costs that will be incurred during the purchase process Provide you with a draft copy of the Home Owners Handbook so that you understand the main responsibilities relating to your purchase and can check that you are able to meet them. Completion of purchase Once a completion date has been agreed, we will arrange to meet you at your new home (new build sales only) to: Give a demonstration of the appliances within your home Explain how to use the heating and hot water system Show you the location of the stop tap and consumer unit Advise you of the defects liability period and provide contact numbers for reporting any defects Provide you with details and meter readings for all of the utilities supplied to your home. Information all sales We will provide you with a welcome pack, which will include the following information: A welcome letter, including information about paying your rent A home user guide for new build sales only A copy of the Buildings Insurance Schedule (if applicable) A Home Owners Handbook User manuals for all appliances fitted to your home (new build homes only) The buildings guarantee certificate (new build homes only). Page 6
Contact Redwing Living Sales team T 0344 7360063 info@redwingliving.co.uk www.redwingliving.co.uk