Different types of Shared Ownership Mortgages

It is important to understand the different types of shared ownership mortgages and schemes available to you that all come under the umbrella term of affordable housing. To help you get your head around all of the terms, here is a simple break down.

NEW BUILD HOME BUY

New Build HomeBuy is essentially another term for a traditional shared ownership scheme where you can part buy, part rent and can staircase your ownership in the property.

OPEN MARKET HOME BUY

Open Market HomeBuy is a new scheme that has been set up by the Government where you by 75% of a property and receive two equity loans of 12.5% from the mortgage lender and the Government or homebuy agent.

SHARED EQUITY

The main difference between this shared ownership scheme and others is that you do not pay any rent on the remaining amount, but you are expected to buy a percentage of the property, usually ranging from 60 - 75%. There are usually strict rules that come with Shared Equity Mortgages and some actually rule out staircasing.

FIRST TIME BUYERS' INITATIVE

This is a Shared Equity scheme that aims to help first time buyers who are eligible, to buy a share in a new home. They must buy at least 50% of the property and then a Government run agency called English Partnership will retain the rest.