Shared ownership mortgages in the UK
March 16, 2010 4:28 AM   Subscribe

My questions are: 1. Does anyone else have experience of getting a shared ownership mortgage in the UK? If so who was your mortgage provider? 2. Is it worth paying an IFA £350 to arrange a mortgage if the number of lenders is limited and I can speak to them directly? What else do IFAs do for their money? I'm struggling to find out who provides this type of mortgage - for more info see below.

The background:
We are buying a flat in London through a shared ownership scheme with a housing association.

The housing association referred me to a firm of financial advisors to arrange the mortgage. The financial advisors want to charge me a fee of £350 to arrange the mortgage plus they seem to get commission from the mortgage lender.

They have already told me that the choice for shared ownership mortgage providers is very limited (they said only two companies do them) - I'm pretty sure Kent Reliance is one of those that do.

My google skills have hit a bit of wall try to find out who else provides these types of mortgage (the results I've found so far seem to suggest everyone does, but I know this isn't true).

many thanks in advance.
posted by mairuzu to Work & Money (3 answers total)
Is the fee of £350 in addition to the fee the mortgage provider will be charging? When my partner and I got a mortgage last year (in the UK- not through a shared ownership scheme) we ended up paying about £500 to NatWest as an arrangement fee.

Our experience went something like this: 1) met with an IFA to discuss our options; 2) compared the deals he could get for us with what we could get directly from the providers themselves (almost always exactly the same); 3) notice we would pay a slightly lower fee if we went directly to this particular provider (not usually the case-worth looking at. Our IFA claimed he wasn't getting a cut of it); 4) applied for a mortgage directly.

From my experience, it's definitely worth talking to the IFA - just to get a better idea of what the market offers. It was really useful for us to hear about how the whole processed worked from a few different people.

But, definitely talk to the providers directly, especially if the £350 is on top of the lender's fee.
posted by brambory at 6:45 AM on March 16, 2010

I also bought a flat in London through a shared ownership scheme with a housing association. However, unless I'm missing something there was no "shared ownership mortgage". Instead a share of ownership was agreed (50%) and then I just got a standard mortgage for the amount through the Halifax. There were certainly many more options than two.

I was also refered by the housing association to an independent financial advisor. As I recall the choice was between giving him the fee directly or the lender paying commission (and implicitly passing on the costs to me), not both. Either way I got the impression he made most of his money on the commission from selling insurance.
posted by ninebelow at 7:02 AM on March 16, 2010

t'other 'alf works for a housing association that works in London. I emailed her and asked if she knew of any shared ownership friendly mortgage lenders but the best she can do is the details of the financial advisor they tend to recommend.

It's quite possibly details you've already been offered by the association you're with (it possibly the same association) but if it helps, drop me a memail and I'll send the details over.
posted by sodium lights the horizon at 8:35 AM on March 16, 2010

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