Someone explain shared ownership (Scotland)

[DSM]

I'm looking at a shared ownership property, and I am so confused about how it all works!

All I know so far is I have to earn over £20k but under £36k. I have to not own a home. So far so good!

But how does it work? Do I just get a mortgage for the value of the % for sale? And then how do I buy the rest, eventually? Save up actual cash? Take a bigger/second/re mortgage?

Also any help with HOW to get a mortgage would Venice - do I just go to the bank and ask?! Do I make an appointment?

Oh god so lost. I've always rented!

The idea is that you own a percentage of the house so say 50% and the builder retains the other 50%. You then pay your mortgage and a small rent to the builder. it can either stay that way or, if you get a windfall or a good salary increase and can borrow more money then you can increase your mortgage and increase the percentage you own on the property.

I wouldn't go direct to a bank. Go direct to a good independent mortgage advisor as they will have the best deals available to you.

If you are Lothian, Borders, Fife I can recommend someone to you.

Thanks, yeah I am in Lothian.

I'm unlikely to get a windfall (fingers crossed though!) and my salary isn't going to double anytime soon. So how would I ever buy up more percentages of the property?

You would pay a mortgage on 50% and rent on the other 50%, and after 25 years you would own 50% outright and have no more mortgage to pay but would still need to pay the 50% rent. At that point (or perhaps sooner if you get a pay rise/promotion in the next 25 years) you might be able to take out a mortgages for another 25% and own a bit more.

The advantage is that once you retire, and have a smaller income, you won't have to pay the same level of rent as you would if you spent the whole time from now till retirement age renting.

Be very careful about the rent level. It should be at or below 3% of the value of the unsold equity per annum, and rent rises shoild be clearly stipulated in the lease. .

It can be harder to get a mortgage on shared ownership, so check this out with a whole-of-market broker first.