Borrowers Share?!

[RedBlu]

Our fixed rate shared ownership mortgage is ending and we want to fix again. The provider has sent us a list of what they can offer and I am now confused.

Some of them say 85% borrowers share, others are 95%, 110% and 150%?

What does this mean? When we took our the mortgage it was 95% plus 5% deposit. We just want to fix the mortgage again, no increase our share or anything?

Anyone know?

I am not entirely sure what you mean by borrowers share - is that like the loan to value (LTV)?

Your "share" will have already increased if you are on a repayment mortgage (and if the house has increased in value it will have increased further, but you would have to get your house revalued to prove this).

So if you started out with a 5% deposit and borrowed 95% of the value of the house from the bank, then depending on how much you have repaid the LTV may have decreased from 95% to 93%, or 90% or whatever as you "buy your house back" from the bank with your repayments.

I am not sure if that is what you mean though, because I don't know how the LTV could be more than 100% (unless its negative equity) and you can't own more than 100% of your house.

Are you sure that they say "110%" and "150"?
If so, I hope someone more knowledgable than me will be along to help you.

If the figures are in brackets like 95%, 85%, 75% etc then
use your current mortgage balance compared to the value of the house to work out what your share now is. Then work out from that which "bracket" you fit into - eg, if you started on a 95% LTV and have reduced it to 90% LTV, then you will qualify for a 95% LTV interest rate if your bank offers it. If your bank offers different interest rates for 85% and 95%, but doesn't differentiate between 90% and 95% then you will only qualify for the higher, 95% LTV interest rate, if that makes sense.

The lower the LTV, the lower the interest rate should be because it is a safer bet for the bank.

^ Sorry just noticed that you said it was a shared ownership mortgage. I need to read posts properly. So its different from the LTV, but I still don't understand how it could be more than 100%

if you can afford it, surely you would want to increase the proportion of the house that you are buying. One day, if you can afford it, you would surely want to own all of it. The longer you wait, the harder it will be.

Well as an example one of the mortgages is called Existing Customer Shared Ownership Fee Free 3.70% Fixed Rate to 31/10/2019 85% Borrowers Share". There are others with different rates and terms but all end with % borrowers Share.

We do intend to purchase the rest eventually but as I am currently on maternity leave and my partner had recently changed jobs, it’s not the right time. We don’t have enough savings to cover the solicitors fees, stamp duty, housing associations fees etc. So we are fixing again and once that time has past we will be in the position to purchase the rest

I would understand 'borrower's share' as LTV. Say your share is 50% of a property worth 200k. So you took out 95k mortgage and put down 5k deposit. That's 95% borrower's share.

They don't call it LTV as the actual value of the property is 200k and 100k and your rate is based on that share only.

That is sort of what I am assuming but am confused then how there can be some for 110% and 150%?!

Maybe the 150% is for people wishibg to purchase a bigger share? Or in negative equity?

Thanks, going to have to ask them as I cannot figure it out when it goes above 100%!

Over 100% of borrower's share must be to lend you the money you would need to increase your ownership share?

Hi I was just wondering if you got an answer to this as I am currently in the same position in trying to remortgage my share ownership property to get a better interest rate.