Shared equity is an innovative form of joint mortgage/joint ownership the government promotes to help the ones who are first-time property buyers. It includes many features that are attractive to a buyer so that he can materialize his dream of owning a new house.
Shared Equity Scheme
The shared equity scheme is launched because of the struggles of the first time buyers become a major political issue in the recent past and it is estimated that the scheme will create an extra 100,000 homeowners in the UK alone by 2010. The major attraction of the scheme is that the buyers could take a 75% mortgage and the remaining part of it will be covered by an equity loan from the government and the lender. This way the buyer gets to save a significant sum on his investment. People will find it quite easy and convenient so that he does not have to go for other alternatives that may be tricky and confusing.
The Chief Features
The shared equity envisages that the first time buyer of the property does not own it in conjunction with any other party as against in the case of shared ownership. At the same time, the scheme takes out more than one loan for the property – an equity loan and a mortgage. There is not going to be any co-owner of the property and you are the sole person on the deeds; however, if the property is to be sold, then the property buyer has to repay all the loans and he has to pay a proportion of the increase in the equity of the property (if there is any) to the party who is making the equity loan. One of the major features of the shared equity scheme is that there is much flexibility and ease to implement it so that the person who is going to buy will be quite relieved at the prospect of a great help from the part of the government.
In certain countries, one of the initiatives was termed as the Open Market Home Buy Scheme and it allows the prospective buyer to choose any property from the open market that comes within their range. The scheme is available to all the key public sector workers, the ones who are on a council waiting list, social tenants and other priority first time buyers that include the ones with a household income of 65,000 pounds or less. There are similar projects in the United States as well and the aim of the project is to revitalize the housing sector by making real estate investments affordable.
The shared equity scheme is quite different from the mortgage loans and the processes and procedures involved in it help the buyer in general and the materialization of the wishes of the buyer, especially the first time buyer, come true. It is a great option for anyone looking to own a real estate property at an affordable rate.