Selling a shared owenership property

413x said:
It will be a new mortgage on worse ltv I assume too. So that ltv will shoot right up right?

Also. Is shared ownership FTB only? (not sure)
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Yeah I think that'll be the killer - if mortgage provider say that it is not a port because LTV is changing (and/or the product is specific to shared ownership). However I can't imagine early exit fees on a £75k mortgage on a 2 year fixed will be too much all being said. A mortgage broker would be a useful person to engage on this 'partially complex transaction'...

Shared ownership is open to all. It is H2B that is government backed shared ownership for first time buyers.
 
dLockers said:
Yeah I think that'll be the killer - if mortgage provider say that it is not a port because LTV is changing (and/or the product is specific to shared ownership). However I can't imagine early exit fees on a £75k mortgage on a 2 year fixed will be too much all being said. A mortgage broker would be a useful person to engage on this 'partially complex transaction'...

Shared ownership is open to all. It is H2B that is government backed shared ownership for first time buyers.
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Exit fees can be between 3 and 5% depending on lender so could be up to £3,750 in the OPs case. Thats a lot of his equity gone there.
 
We sold our SO house last year. Look at your contract for the additional costs you will be liable for (management fees, HA's legal, listing fees etc) so you can take that out of your equity. This assumes you are SO with a Housing Association and not a developer.

You equity as entirely based on current value. You can get an EA to give you a price but your HA/Dev will likely have a requirement for a surveyors valuation which you will have to pay for. This may not match the EA prices.

SO is not as easy to leave as you think but is possible. I can post our rough numbers below so you can see what happened.

Bought 30% in 2009 of £125k paying £7500 deposit and leaving £30k on mortgage.

Sold in 2020 for £175k value making our share worth £52.5k. We owed £26.7k on mortgage after 10 years (long term mortgage) which left us just under £26k in equity.

From that we had to pay out the following:

Sale valuation - £220
Selling fee - £972
Assignment of lease - £420
Management Pack - £100
Conveyancer - Sale - £1000
Conveyancer - Buy - £1000
Deposit on new house - X
Stamp Duty - X

Conveyancers seemed to like adding extra charges as soon as SO was mentioned as there are more contracts to review.

We also had to pay off our old SO mortgage as it was a specific product and start again. No porting was allowed as the lending terms are different. Our SO mortgage was with Halifax.

Final thing to note is that your contract may say who you can sell to. As SO you may not have a right to put the property on market (Check your contract). It may be required to go back through original seller to find a buyer. In our case they had 3 months to do this which slowed us down a bit but we forced through a preferred buyer in 6 weeks in the end.
 
Greebo said:
Exit fees can be between 3 and 5% depending on lender so could be up to £3,750 in the OPs case. Thats a lot of his equity gone there.
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I believe same for mine.
3yr fix.
5,4,3 fee. Each year.


With all the other fees it looks like op would be down 5-7k ish before stamp duty
 
Isnt this quite basic?

look into what value you expect to sell at/what it is worth now. take 40% of that. Then take away the outstanding mortgage from that. That will be your equity.
 
Bassmansam said:
I thought it might be but wasn’t sure of any extra costs or whatever.
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Well, as has been mentioned,you might well get stung on an exit fee seen as you just signed up to a new two year fixed.

If you are able to port the mortgage to a new property (ie use the same mortgage provider), that might be worth doing. I did that on my last move with and it saved me a hefty exit fee.

Obviously you have all the usual moving fees on top of that which can certainly mount up.
 
First 40% of a mortgage time duration is you paying off mostly interest, after that the balance swings and you pay more off of the capital, than the interest, although you still are paying the interest too
 
Get a valuation. Estimating the current value is c. 320k you would have 128k less outstanding mortgage of 75k less fees of 5-10k. You likely have about 45k of equity/deposit for your new place, maybe a little more if fees are lower or current value is higher
 
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