The rising cost of real estate is making it harder and harder for first time home buyers to obtain a home of their own.
A new trend that is making it possible for individuals to obtain their own property is the idea of a shared ownership mortgage.
Shared ownership mortgages – how do they work?
This allows the individual to purchase a percentage of the property, therefore lowering the price of the property for them.
With only a part of the property actually being bought by the prospective buyer, the amount that they will need to borrow for a mortgage will be lowered as well.
This lets individuals who could not otherwise obtain the property of their dreams to get the mortgage they need to purchase that property.
This trend is also spilling over into the commercial sectors as well. The higher visibility, more sought after properties tend to be far more than the average individual can afford.
They therefore contract to purchase a percentage of the property while renting the remaining part of the property.
While this sounds like an expensive venture, many times it tends to lower the overall cost of merely purchasing or renting.
The majority of properties that can be bought through a shared ownership mortgage are typically offered through a housing association. This in itself has proved to be a problem for some because housing associations tend to have strict rules concerning credit and credit reports and the amount of income one must have in order to be in their community.
There are a few commercial real estate agencies that are now getting into the shared ownership mortgages market. They are finding that this realm offers a great deal of advantage for both the individual who wishes to buy the home, and the individual who presently holds the deed to the home.
Overall, shared ownership mortgages have proved to be a win win situation or everyone involved in them.
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