Questions about shared ownership and income etc

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Has anyone done it? OH and I are looking into it. Our buying options are limited at the moment because I have recently gone self employed and I understand my income can't be taken into account for a mortgage until I have 2/3 years of accounts. I have a registered ltd business and I will pay myself a small salary and draw dividends. (Im just getting to grips with it all! )

We are looking at shared ownership and the long term plan would be to buy 100% of somewhere when I can have my income taken into account for the mortgage in a few years

My question is - once we find a place we will have to give the housing association our income. The max income is £66,000 and I imagine the closer to that the better. OH earns £47,000 which will be used for mortgage calculations.

Should we add in my income for the housing association and if so what do we say it is? I have some work at the moment paying the business about £2k a month but of course this will change throughout the year, and other work should see that rise. My planned salary will be £10,000 a year, so below the tax threshold. (And then tax will be paid on dividends.)

So our total income is circa £57,000

Or do we say my income is more taking into account money paid to business?

Or do we just declare OH's income?

I hope this makes sense! Any advice appreciated, thank you.
We want to be honest but also want to give ourselves the best chance.

Hopeful bump!

We were in shared ownership for 6 years.

As long as our income was over 15k and we met the other criteria, the housing association were fine with it. They won't care about you being 47k or 57k as long as you don't put yourself over their maximum threshold. It won't give you a better chance with them.

It's the mortgage you will need to think more about with the new mortgage rules.

Agreed, I think they're more concerned that you don't go over their limit - it's the mortgage that will be more difficult

I work for a mortgage advisor that does a lot of shared ownership mortgages. There are 2 issues, fitting the eligibility of the shared ownership scheme, and then eligibility for a mortgage.

For the mortgage, it will depend on how much you need to borrow. All lenders have to look at affordability. If you don't earn anything you may be classed as a dependent which could reduce the amount you can borrow. A mortgage broker should know the different lending criteria of different lenders.

Just bought one (we move in this Friday!!)

We went shared ownership due to my financial history, so DH bought it himself (single application on the mortgage) but we made a joint application to the Housing Association. We were just under the threshold fortunately.

I'd say declare both incomes on the application for the shared ownership, but just your OH's for the mortgage application. We went via Nationwide and they turned us down first because they didn't like DH's association with me, but moved it to Santander and were approved in four days.

Good luck!

Thanks all.

JustStirItaUna - can I ask you what the process has been for you to get to this point?

I have seen a few local developments and am waiting for them to 'go live'.

What are the steps you go through? I imagine they will be very popular (small blocks, in london, so not loads available)

We're going through this at the moment although not in London and ours is resale but I'd imagine process is roughly the same.

Put in an application/interest to the HA letting them know you want to buy. I believe they have to approve your application first, then you pick a house (unless you already have one in mind) and you let them know you'd like to buy it. But almost simultaneously (after application accepted) get to a mortgage broker (we went for one specialising in S/O) for a decision in principle. Have all ID and proof of income ready as well as a proof of deposit.

If your DIP goes through OK, get proof and provide to HA. They may ask for a deposit on the property you want to go for. Once you've got details like service charge, monthly charge etc and a timescale for build (since you've said new) check with mortgage broker when they're going to put a full application in. I'm guessing if in process of being built then no immediate rush for this but it is a fast moving market and things can change so be aware that if it's going to take longer than 6m to build your DIP will run out.

For us, as it's resale everything has moved quickly. Once our 'full' mortgage application came back we instructed a solicitor to deal with the purchase and HA have taken a bit of a backstep from there.

It might be a little different as you're looking at new build but this was generally what we did - you need to make sure you're in a position to move quickly with all the relevant paperwork as I'd expect demand to be high!

Sorry that says DIP will run out after 6m - I meant the 'full' mortgage offer from (whoever). I think the DIP runs out quicker than that but can't remember

Thank you that's very helpful.

The homes seem to be built before going on sale.