When considering buying a Shared Ownership home, you need to plan for all costs involved in purchasing the property, as well as future expenses. After finding a home you want to buy, a mortgage adviser will assess whether you can afford the payments for your home.

Costs of Buying a Shared Ownership Home

Reservation Fee for a Shared Ownership Home

When you find a home you want to buy, you'll typically need to pay a reservation fee of up to £500 to the landlord. This fee:

• ✅ Reserve the home for a fixed period, as decided by the landlord.
• ✅ The fee will be deducted from the final amount you pay.
• ❌ However, you will usually not get the fee back if you decide not to buy the home.

Deposit Requirements for Exchanging Contracts

When exchanging contracts, you will need to pay a deposit. The amount required will vary depending on the property and the application, but it is typically between 5% and 10% of the share you are purchasing. Non-UK citizens may be required to pay up to 25% of the share price as a deposit.

• ✅ The larger the deposit you make, the better the interest rate you will receive.

Solicitor and Conveyancer Fees for Shared Ownership Homes

You will need a solicitor or licensed conveyancer to perform the necessary legal work. It is essential to have instructed a solicitor before submitting your mortgage application. Typically, the solicitor's fees will be based on a fixed cost basis.

• ⚠️ Verify your solicitor is approved to work for your mortgage lender.

Considerations for Mortgage Broker Fees

You may want to consider hiring a broker or adviser to guide you through the mortgage process. Most brokers charge a fee for their services, which can vary from a fixed amount to a percentage of the purchase price.

• ⚠️ Understand what and when the fees are charged before they undertake any work on your behalf.

Understanding Stamp Duty Options for Shared Ownership

For first-time buyers, the first £425,000 of the property value is exempt from stamp duty. When purchasing a property, there are two options for paying Stamp Duty:

• Pay on the full value of the property
• ✅ You never have to pay again, even if you later buy the property outright at a higher price.
• ❌ There is a higher initial cost if the property does not qualify for the zero stamp duty allowance.

• Pay only on the share that you are purchasing
• ✅ It reduces the initial buying cost.
• ✅ You do not have to pay more stamp duty until you purchase 80% share.
• ❌ The overall cost may be higher when you purchase 80% share or more.
• ❌ There may be extra charges based on the rent payable over the term of the lease.