Checklists
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Beware that even if the developer is offering a shared equity scheme they may only offer the scheme on certain plots or properties, not every property on every site. | |
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Find out what level of shared equity the developer will offer you. Typically they are around 85%. So if the property is being sold for £200,000, you will initially only have to pay for £170,000. | |
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Find out how quickly the balance owed will need be paid. Some offers only extend to one year, then you have to start paying back the money as a loan. Other deals may require nothing for the next 5 or even 10 years. | |
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Once you have found shared equity deals, it is important to make sure you don't compromise on quality to get the deal. You will need to maintain the property and live in it, so for example, you don't want paper walls or poor quality window fittings. | |
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Always ask to see a copy of gas and ideally electrical safety certificates, the EPC will tell you how much your running will be (eg gas/water/electrics). | |
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Find a good legal company who will look after your interests. Sometimes this will be someone recommended by the developer, but sometimes their business relies on the deveoper, so they might not 'fight your corner' as hard as an independent solicitor would. | |
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Find a good broker who has dealt with shared equity cases before, ideally with the same developer, this will help make sure they have the experience to find you the right mortgage deal. Ideally you should NOT have to pay a broker unless you take up their recommendation. | |
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Just because you are getting a shared equity deal, doesn't mean you can't negotiate extras, like landscaping the garden, better kitchen appliances etc. | |
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Always check carefully the paperwork from lenders/brokers and your legal company. Make sure the price is as agreed on the contract and make sure the date for your completion is right too - developers can change this if they haven't completed yet, so check by how many months they can bring the sale forward - or delay it. | |
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Ensure in your contract to exchange it allows you to have a 'snagging survey' just prior to completion so any problems with the property can be highlighted - and more importantly fixed - before you move in. | |
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You can move in on completion day, but make sure you budget to pay back the developer and don't rely on house price growth to increase the equity in your home to secure a higher mortgage in the future. Make sure you can afford both the mortgage and any repayments required by the developer. | |
