Shared ownership

[dabweb1982]

Looking to buy a shared ownership property. I would be in recipient of housing benefit which from my understanding would cover the rent side of things. My problem is the affordability side of obtaining a mortgage as my mortgage advisor has said he isn't aware of any lenders who that take housing benefit into consideration. Reading through the threads there was a mortgage advisor who said he knows two lenders that take figures from "entitled too" and will take housing benefit into consideration. Has anyone experienced this and know of any lenders.

The reason most lenders (all lenders that I am aware of) don’t take housing benefit into consideration for a mortgage is that you are not entitled to any housing benefit towards a mortgage.

I think there's only 1 shared ownership mortgage that does accept benefits I want to say it's Leeds or skipton, you can't just have any mortgage there's specialist S/O mortgages

However, given you'll need UC can you actually afford maintenance of a house or if a flat section 20s? Consider it carefully

I'm not talking about housing benefit towards the mortgage. I'm talking about housing benefit paying the shared ownership rent and the overall affordability of the mortgage as the rent in a way is covered by housing benefit.

Yes, but what I’m saying is because you are applying for a mortgage, most providers will not consider housing benefit because typically when applying for a mortgage you wouldn’t be getting any. Shared ownership is the exception.

@dabweb1982 The truth is, you cannot afford this. The crash of 2008 was mostly due to lending to people who could not repay their mortgages. Relying on benefits for any financial loan is a disaster waiting to happen. It’s well documented that the rent on these properties goes up fairly quickly and benefits don’t. Plus what about mortgage rates? They fluctuate.if you earn enough for a mortgage, why would you get housing benefit anyway? In my view, you don’t need it.

I think in your situation you would need to be able to buy your share outright, maybe with a loan? But you wouldn't be able to secure a mortgage.

They don't seem to have a problem with this, as long as the reason you can't obtain a mortgage isn't that you've got poor credit.

They'll do their own financial assessments to see that you meet affordability criteria, BUT you also need to consider the pot of money you'd need for repairs over time.

The NHBC guarantee you get doesn't cover everything. For example if your fence is badly damaged in a storm, you need to pay for that out of pocket. Plenty of things could go wrong costing a few k a time and you're pretty much on your own with that.

@dabweb1982 L&C are a free mortgage broker that can search for shared ownership mortgages for you. I haven't used them myself but since they are free it's probably worth giving them a call and explaining your situation: www.landc.co.uk/mortgages/product/shared-ownership-mortgage

We earn joint salary of 30k. Have been told we can get a mortgage of £110k on a normal property but shared ownership can only get £70k due to the rent share. As mentioned the rental side would be covered by universal credit housing element. That's why I've asked if anyone knows any lenders that take benefit (specifically housing element) into their affordability costings.

I appreciate all the advice and input.

I think in your position you shouldn't do it