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How to apply for a Shared Ownership mortgage

Key information you need to know about applying for a Shared Ownership mortgage.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 27th August 2019 *

We get lots of enquiries from people who want to know how they can apply for a Shared Ownership mortgage because they cannot afford to own 100% of a property. 

The good news is that  the advisors we work with have access to hundreds of lenders across the UK and know which ones have the best rates and are more likely to accept your application

If you want to know more about applying for a Shared Ownership mortgage, read this guide which includes everything you need to know on:

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How to apply for a Shared Ownership mortgage

We have broken down the process in the next section of this article, but before you begin, it’s always worth seeking specialist advice.

The advisors we work with are experts on Shared Ownership mortgages and they can guide you through every step of the application process. What’s more, they’re whole of market, so they can also make sure you end up with the best deal that you qualify for.

You can take the first steps towards your Shared Ownership mortgage application by making an enquiry with us.

The Shared Ownership mortgage timeline 

It can be helpful to know what steps you need to take and who you need to contact to proceed with a Shared Ownership mortgage application, and we’ve broken them down for you below...

1. Check if you’re eligible for Shared Ownership

You may be eligible for a Shared Ownership mortgage for a property, be it a house or a flat, if the following apply to you:

  • You are a first-time buyer, or have owned a home previously with Shared Ownership
  • You have a combined income of less than £80,000 if you live outside of London, and less than £90,000 if you live inside London
  • You plan to live in the property and not rent out any part of it
  • Have the permanent right to live in the UK
  • Are 18 years old or over

For an in-depth look at the rules of Shared Ownership, make an enquiry to speak with one of the experts we work with today.

2. Find a Shared Ownership property or developer in your area

Shared Ownership is usually (but not always) available on new-build properties that have been built by house-builders who offer Shared Ownership as a scheme for new homeowners. 

If you are unable to find a property via online property portals or the government Help to Buy: Shared Ownership website, it can be helpful to contact a mortgage specialist who can search the market for you. 

3. Talk to a mortgage advisor

As well as helping you apply for a Shared Ownership mortgage, a mortgage broker can help you:

  • Calculate how much deposit you’ll need
  • Work out how many shares you can afford to buy
  • Find the best lender for you

4. Calculate how much deposit you’ll need

A great appeal to many buyers is that often the deposit required for this type of mortgage is low. In fact, there are lenders who offer Shared Ownership mortgages with a 5% deposit and a few who will approve customers who have no deposit at all.

Another benefit for buyers is that the deposit amount for a Shared Ownership property is calculated based on the percentage of the purchase price of the share that you own (not the total property value). 

For example if you want to purchase 25% of a property worth £200,000, you would need a mortgage for 25% of the property value (£50,000) If the lender asks for a 5%  deposit that would equate to £2,500 which would then leave your total mortgage amount at £47,500.

Sometimes the amount of deposit you’ll need can vary from lender to lender and your own affordability and credit score can also affect the size of your deposit too. 

This can make it difficult to calculate your deposit size but a mortgage advisor can look at your circumstances in depth as well as compare lenders to establish how much you will need.

Contact a specialist to calculate your deposit for a Shared Ownership mortgage.

5. Work out how many shares you want to buy

If you are buying your home through a private Shared Ownership developer, the amount of equity (shares) you own in a Shared Ownership mortgage is usually up to you (as long as you have the finance and can afford the repayments.)

The only exception to this is if you’re buying a property through Help to Buy: Shared Ownership, which is a government scheme that allows you to buy between 25-75% of the property’s value.

To give you an example of how much a share could be and how this can affect your mortgage amount, please see the table below.

Property price of £200,000
Share Percentage of Shared Ownership mortgage Share as GBP Deposit amount (5%) Mortgage amount
25%  £50,000 £2,500 £47,500
30% £60,000 £3,000 £57,000
35% £70,000 £3,500 £66,500
40% £80,000 £4,000 £76,000
45% £90,000 £4,500 £85,500
50%  £100,000 £5,000 £95,000

6. Find a lender

We’ve helped lots of borrowers that have struggled to find a lender who will consider their Shared Ownership mortgage application. You may have found yourself that there are fewer lenders to choose from, especially if you have more complex financial issues such as “bad credit.”

The great thing about using a mortgage broker is that they’ll already know a good selection of lenders to recommend to you, even if other lenders have turned you down in the past.

Finding the right lender for you is so important because you’ll want to take out a mortgage with an affordable interest rate and fair terms and conditions. A broker with experience can research help you avoid paying more than you should in interest and fees, and can also help you apply for a Shared Ownership mortgage in principle online.

To find a Shared Ownership mortgage lender, talk to one of the advisors we work with here.

7. Receive a Shared Ownership mortgage in principle 

Once you have found a lender who will approve your mortgage, you should receive a mortgage in principle for Shared Ownership (also known as an AIP) and a valuation which needs to match the property sale price.

Your offer usually has an expiry date of six months (or less), so contracts must be exchanged within this period for the offer to still stand.

Your solicitor should then send confirmation to the Shared Ownership developer of your mortgage in principle offer either online or through the post, along with the valuation and your deposit amount and then request approval to exchange contracts. 

8. Complete the process and move in

Once the mortgage contracts have been exchanged between your solicitor, lender and the developer (and this has been done within 6 months of your initial application), you will be able to complete on the property and enjoy your new home.

How long does a Shared Ownership mortgage application take?

The Shared Ownership decision process can take up to 12 weeks between the agreement of the sale and exchange of contracts.

Can I apply for a Shared Ownership mortgage online?

Yes - you can kick your application off online by making an enquiry here and speaking to a whole-of-market broker. They will carry out as much of the process as possible through online channels, if that is your preference, and make sure you are introduced to a lender who is also happy to operate this way.

Why you should speak to the Shared Ownership advisors we work with 

A mortgage advisor can take you through the Shared Ownership mortgage checklist and ensure that the correct documents and contracts are completed for you and sent to your solicitors, lender and property developer. 

The advisors we work with are carefully vetted and trained to take you through the Shared Ownership application process as smoothly as possible whilst finding you the best rates for your mortgage.

Here at OMA, we know the specialists in the UK who are in the best position to help you. The brokers we work with are:

  • Whole-of-market brokers
  • OMA Accredited 
  • LIBF Training course qualified
  • Experts on Shared Ownership applications

Contact an expert on shared ownership mortgages

If you have questions about Shared Ownership mortgages and want to speak to an expert for the right advice call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 27th August 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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