A bit of background:
Our client became a homeowner by securing a shared ownership mortgage on his first home, the mortgage type that was not only the most sensible one for the property type and area but also the most cost effective for a first-time buyer living on a budget! He decided that he would purchase 50% of the property because he didn’t have a large deposit and would secure a mortgage against this share.
With all shared ownership purchases, the remaining 50% share of the property not owned by the client would incur a rent charge per month so essentially our client would pay a small amount per month on his mortgage and a small amount of rent per month on the share he didn’t own. After a few years of living in the property and getting comfortable with home ownership he wanted to explore his options with purchasing 100% of the shares in his home, something known as staircasing. That’s where we come in.
What did we do to help?
Senior mortgage and protection advisor Jade Pinkerton was contacted by the client to investigate his current mortgage deal and see what could be done to help him staircase up to full ownership. Jade had an in-depth conversation with him and discussed several different strategies with regards to how best to go about the staircasing. The client initially thought that he needed extra savings/a deposit to buy the extra share, so was originally going to put his own money into the purchase.
He also considered potentially adding his girlfriend to the mortgage/deeds to increase mortgage affordability but decided not to go down this route. Jade quickly discovered that his equity in the property had grown by quite a bit over the last few years and he had a good amount of equity in the property already. Therefore, we decided the best course of action was to remortgage the property, raise additional money in the form of the mortgage and that would mean that the client doesn’t need to put his own savings into this purchase. Always a bonus!
Remortgaging had more benefits than one as it also allowed us to completely re-structure the homeowner’s current mortgage deal and explore the market for the best and most competitive rates. His previous interest rate was at 2.79% but we have managed to secure him an incredible 1.29% deal which he was pleased with as well. Due to the expert advice that Jade gave, the low interest rates currently available and, no longer having to pay the rent on the shared ownership part of the property, our clients monthly payments are less than they were before, and he now owns the whole property.
Even though we have a happy homeowner finally enjoying 100% ownership we are always thinking forward to the future. Our client is on an amazing mortgage path now, and we want to keep it that way, so we have already spoken to our client about his options when his fixed rate period comes to an end in the future. 4-6 months before the fixed period comes to an end we will get back in touch with our client and have another look at his circumstances and once more we will search the market and re-structure his mortgage to make sure he keeps on feeling comfy and secure with his home ownership.
A word from Jade Pinkerton: “It was great to work with this client, especially as there were several different options available to the homeowner which would allow him to staircase to the 100% property ownership he wanted. After talking through all the possibilities, comparing strategy, rates and monthly payments, the client was thrilled to find out that he didn’t have to use his savings towards this purchase – and instead intends to use these towards setting up his new business, which is extremely exciting.”
Oportfolio’s wealth of mortgage knowledge really this homeowner to achieve his dream. If you or someone you know is in a similar predicament to our client, please give our friendly team a call on 020 7371 5063 to see how we can help you too!