100% LTV Shared Ownership Mortgages

If you’ve decided that the shared ownership scheme is for you but your savings don’t allow for any deposit at all, it’s likely you’re hoping that 100% loan-to-value (LTV) mortgages exist in this territory.

The good news is they do, but they’re rare. The trick is to understand whether you qualify for one and how to find one. Here we take you through what you’ll need to consider before moving forward without a deposit.

Can you get a 100% loan-to-value (LTV) shared ownership mortgage?

Yes, it’s possible, but they’re not freely available to everyone and there isn’t a huge amount of choice. About half of all lenders will consider offering shared ownership mortgages, and only a small handful of those could allow you to borrow 100% of your share of a property.

While there are far more options out there if you stretch to 90% and 95% LTV (10-5% deposit needed), there are forward-thinking and flexible lenders who have made it their business to give low income borrowers a foot on the property ladder and support first-time buyers.

Finding who they are and how to secure a 100% mortgage is something you will need professional help with to make success more likely. Which is why contacting a broker before approaching any lenders is a shrewd move from the outset.

Which lenders are willing to lend 100% of your share?

At the moment there are very few lenders who are willing to stretch to this kind of mortgage, and those who do don’t openly advertise it. That said, there are others, such as Kent Reliance, who have been happy to talk publicly about the introduction of these products, and their reasons for doing so – to allow broker partners somewhere to go for the clients who need a flexible criteria.

It’s worth remembering that while the market is not always accessible to customers, good professional brokers have contacts and knowledge of the entire landscape, so they can comb lenders’ offerings for these deals, as well as keep informed of any changes in the industry.

How do you qualify?

You must be eligible for both the shared ownership scheme and the set of criteria set out by the mortgage provider. For the scheme, there are various aspects you’ll have to qualify for. For example, some housing associations aim the partnership at key workers, some are strict about the purchase being your first home while others are not, property type is a factor, and there is a household income limit of £80,000 (£90,000 in London).

When it comes to qualifying for a 100% mortgage, your affordability is key. Your credit history will be taken into consideration, as well as your age, expenditure and income. Your potential ability to ‘staircase’ (work towards owning a greater share of the property) might also be looked at, as well as the cost of the property you wish to buy, as minimum and maximum borrowing caps usually apply.

How a broker can help

Because rates, deals, rules around property types and eligibility vary greatly with shared ownership mortgages, and especially those at 100%, working with an advisor who specialises in these products is crucial to how well your application is going to be received.

In fact, some 100% shared ownership mortgage lenders, such as Darlington Intermediaries, stipulate that you must go through a broker to work with them, so ensuring you get the best one for you is key.

The brokers we work with can help you through the application process. They will offer advice and do all the meticulous work to find the right deal you could qualify for.

If you get in touch we’ll arrange for an advisor to contact you straight away.

Things to consider

There are a number of elements you need to know before committing to this method of borrowing. Firstly, you’re applying for a specialist scheme. Secondly, a 100% mortgage that’s linked to that scheme. Both are niche and come with their own complications.

Working alongside an expert for support, it’s worth taking the following points into consideration:

Interest rates can be high

The higher the risk, the higher the interest rate you’re likely to end up with, and the fact remains bigger deposits unlock better rates. Even a 90% LTV shared ownership mortgage would make a significant difference. Choice is also scarcer for this kind of borrowing, which reduces an abundance of favourable deals.

Guarantor mortgages are not permitted for shared ownership

You will not be able to provide the additional protection of a guarantor to secure your mortgage, but cash gifts and inheritance are accepted towards shared ownership borrowing.

Your borrowing is capped

On top of working out ownership portions, loan-to-value ratios, minimum and maximum borrowing limits and income ceilings, you must also bear in mind that the average mortgage will still be capped at around 4.5 times your income, as is standard.

You must take on a repayment mortgage

Interest-only mortgages are not permitted on the shared ownership scheme. In fact, many lenders want to be sure that you’ll be able to work towards repaying more of the mortgage eventually, rather than not paying off any capital at all.

You will still need funds for associated buying fees

If you don’t have any money saved towards a deposit, you should bear in mind that you’ll still need something put aside for the costs that come with buying a home, such as surveys, arrangement fees, solicitor charges and even stamp duty.

Get matched with a specialist shared ownership broker

If you’re feeling daunted by the task ahead of applying for a 100% LTV shared ownership mortgage, but also determined and excited by the prospect of home ownership, it will be a relief to get the right broker by your side as you get started.

We are able to handpick experts in their field from our network of professional mortgage advisors and match them to your unique circumstances. Our shared ownership brokers are fully vetted for providing an honest and reliable five-star service, and they would be happy to work on your behalf to find you the best deal.

To find out whether they can help you, call us on 0808 189 0463 or make an enquiry online for a free, no-obligation initial consultation.