A Shared Equity purchase is where you buy a home with a mortgage and a second loan, known as an equity loan, which is usually offered by the government or via local authority. The equity loan provider then owns a stake in your home which is repayable when you sell the property.

The two main Shared Equity Schemes that we deal with are:
Help to Buy
Help to Buy is a scheme by which the Government will loan you up to 20% of the value of your new build home (40% in London)

You can access the Help to Buy scheme provided you have a minimum deposit of 5% and wish to buy a new build home.  You will need to meet appropriate tests to ensure that you are able to pay back the mortgage as well as passing the mortgage lenders credit and affordability checks.

Properties under this scheme can be up to £600,000 in value and it is open to both home movers and first time buyers, provided it is for the applicant’s occupation only.  It is only available to individuals, not Companies, and is applicable only through participating developers and HomeBuy agents.

In essence, the Government provides buyers with an equity loan of up to 20% of the value of a new build property (40% in London).  The loan is interest free for the first five years.  From year six a fee of 1.75% is payable on the equity loan, which rises annually by R.P.I. inflation plus 1%.

The loan can be repaid at any time within 25 years (or the term of the mortgage), or on sale of the property.

One of the key advantages to this scheme is that even though you may only have a 5% deposit, we can access mortgages with very low interest rates, which would normally only be available to those with much bigger deposit.
Newham NewShare Scheme
The Newham NewShare scheme is very similar to Help to Buy but is funded by The London Borough of Newham and is targeted at those living and working in the London Borough of Newham.

Through the scheme you can purchase a newly refurbished or a brand new home with an equity loan of between 30% and 50%. The main difference between the Newham NewShare scheme is that the equity loan is not free for the first 5 years and you will be charged a fee of 1.75% from day one of moving into the property. Because of this and because the scheme is unique to a single borough in the UK you are very restricted in terms of which mortgage lender you can use.

SO Mortgages have been working with Newham Council since the scheme’s inception and have arranged special mortgage deals directly with a couple of mortgage companies who are willing to lend on the scheme. To date we have helped hundreds of Newham residents successfully purchase a home on this scheme.

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