Shared Equity Mortgage

Our mortgage network, Pink Home Loans conducted a survey in July 2009 and found that 40% of intermediaries were considering shared equity mortgages as an option for first-time buyers.

We think these mortgages can make a lot of sense for certain types of people. As always much depends on your circamstances.

What is a shared equity mortgage?
Shared Equity means that you buy a given equity share in a property with the aid of a mortgage – for example 75%; however, while the developer and/or Government own the remaining share you do not pay rent on it.

When the property is eventually sold the developer and/or Government will be entitled to receive their share of the value (equity) of the property. For example, if a property was originally purchased for £100,000 and you initially raised a loan for £75,000 (therefore having a 75% share) then the developer and/or Government would own a 25% of the value of the property.

Sometime later, when you wish to sell, and the property was now worth, for example £150,000, then you would receive £112,500 (75%) of the sale price, and the developer and/or Government would be entitled to receive the remaining £37,500 (25%).

Shared equity has some similarities with shared ownership but they are different.

Find out if a shared equity mortgage is right for you by speaking to our resident mortgage expert. Our quick response On-Line form is here.

All you need to do now is call us or complete the On-Line form to get started.