Adrian Moloney | 10.12.2020
The fourth article in our series attempting to debunk some of the common shared ownership myths looks at what may be putting brokers off taking on shared ownership cases, and if it really is a lot more complicated than a standard residential case.
Not really. While there’s more paperwork involved for your client, as they’ll have to deal with the affordability requirements and paperwork requested by the housing association, there isn’t often much more for you to deal with than a straightforward mortgage application.
The lender may require additional information if the deposit is a “gift”, such as bank statements and a “gifted deposit” letter from the giftor, but this is no different to a standard purchase where the same situation could arise.
The lender will more than likely require confirmation from the housing association regarding rent and service charge amounts, but this could be one piece of paper or even a quick email.
One piece of documentation that is an extra requirement is a memorandum of sale, which the housing association
If it isn’t a straightforward application, your client has a less than perfect credit score, or other unusual sources of income, there may be further documentation required (six months’ bank statements instead of three, for instance), but this isn’t exclusive to shared ownership.
One thing that may be an issue if applying in the next 6-12 months is if your client has been in receipt of any furlough payments. It is best to check the lender’s policy on this from the outset.
It may also be a good idea to give your clients a list of documents the lender is likely to require at the outset (before even an AIP is agreed) to minimise delays later on if the lender requests further documents not provided at the beginning.
Shared ownership is a section of the market you can’t afford to miss out on, with the supply of shared ownership homes having increased substantially, from around 4,080 units completed in 2015/16 to more than 17,000 in 2018/191.
Kent Reliance for Intermediaries is here to help you all the way through the process. Fully experienced with shared ownership, we have a range of tools to make life easier for you, as well as a wide range of products.
To make things easier for you, our mortgage submission checklist details everything you need.
Read the other articles in our series so far:
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