Shared Ownership ,paying of rented equity.

ddub11

Hi, i have a shared ownership apt with fingal county council.

I am considering paying off the rented portion in one lump sum the idea being this will reduce my monthly payments.

I was wondering if anybody has gone through this process and if it was a smart move?

surrender monkey

ddub11 wrote: »

Hi, i have a shared ownership apt with fingal county council.

I am considering paying off the rented portion in one lump sum the idea being this will reduce my monthly payments.

I was wondering if anybody has gone through this process and if it was a smart move?

If you have the cash pay it off. I don't know how long you have the property but the sooner the better , the value of the councils share will be going up. Apply for the figures from the council, you will need a solicitor though as there is a small bit of legal work to be done, land registry fees etc.

ddub11

surrender monkey wrote: »

If you have the cash pay it off. I don't know how long you have the property but the sooner the better , the value of the councils share will be going up. Apply for the figures from the council, you will need a solicitor though as there is a small bit of legal work to be done, land registry fees etc.

Do you recommend a solicitor? i was talking to a girl in the council and she was saying while some people use them their not really needed and she felt it was not worth the money.

not sure what you mean when you say the value of the councils share will go up?
I was under the impression their share was a set figure i paid back per month as part of my mortgage,i understand my mortgage going up down with interest

But how would the councils share go up independently?.

The_Conductor

ddub11 wrote: »

But how would the councils share go up independently?.

The council own a percentage of the property- which was established at the outset. Both your and their portion of the equity, has been increasing in value.

There is a council mortgage- and there is the rental equity scheme- which are two entirely different things.

If you have a rental equity scheme- regardless of what the girl in the local authority said, it would be a good idea to get your own solicitor- as it can be complicated. A council mortgage- on the other hand- is relatively straight forward.

surrender monkey

ddub11 wrote: »

Do you recommend a solicitor? i was talking to a girl in the council and she was saying while some people use them their not really needed and she felt it was not worth the money.

not sure what you mean when you say the value of the councils share will go up?
I was under the impression their share was a set figure i paid back per month as part of my mortgage,i understand my mortgage going up down with interest

But how would the councils share go up independently?.

In relation to the legal work a deed will need to be prepared merging the shared ownership lease back into the freehold folio and transferring the freehold folio to you. That deed will need to be stamped and lodged in land reg for registration. It's not as simple as paying off a mortgage this legal work has to be done in order to register the freehold into your name.

In relation to the value of the councils equity I'll give you this example. Say you bought the house in 2000 for 100,000. The Council % equity is 50%. 15 years later the value of that property has risen to 150,000. The councils equity would now be worth 75,000. My figures are crude but the councils equity in the property can go up and down.

The idea of the scheme was to buy out the council at the earliest opportunity in the first couple of years. You should request your figures.

ddub11

surrender monkey wrote: »

In relation to the legal work a deed will need to be prepared merging the shared ownership lease back into the freehold folio and transferring the freehold folio to you. That deed will need to be stamped and lodged in land reg for registration. It's not as simple as paying off a mortgage this legal work has to be done in order to register the freehold into your name.

In relation to the value of the councils equity I'll give you this example. Say you bought the house in 2000 for 100,000. The Council % equity is 50%. 15 years later the value of that property has risen to 150,000. The councils equity would now be worth 75,000. My figures are crude but the councils equity in the property can go up and down.

The idea of the scheme was to buy out the council at the earliest opportunity in the first couple of years. You should request your figures.[/QUOTE
Ok so say the rented equity(the councils part)goes down?the point im making is over the last eight years my mortgage(rented equity is included)has really gone down ,not by a lot but it has not risen much if any either so how come thats not effected if its a case of the councils share going up?hope that makes sense.

I guess it would make sense to get a solicitor giving whats involved.

surrender monkey

ddub11 wrote: »

surrender monkey wrote: »

In relation to the legal work a deed will need to be prepared merging the shared ownership lease back into the freehold folio and transferring the freehold folio to you. That deed will need to be stamped and lodged in land reg for registration. It's not as simple as paying off a mortgage this legal work has to be done in order to register the freehold into your name.

In relation to the value of the councils equity I'll give you this example. Say you bought the house in 2000 for 100,000. The Council % equity is 50%. 15 years later the value of that property has risen to 150,000. The councils equity would now be worth 75,000. My figures are crude but the councils equity in the property can go up and down.

The idea of the scheme was to buy out the council at the earliest opportunity in the first couple of years. You should request your figures.[/QUOTE
Ok so say the rented equity(the councils part)goes down?the point im making is over the last eight years my mortgage(rented equity is included)has really gone down ,not by a lot but it has not risen much if any either so how come thats not effected if its a case of the councils share going up?hope that makes sense.

I guess it would make sense to get a solicitor giving whats involved.

I'll go back to the example I gave above. The house you purchased was 100,000. The councils equity was 50%. You took out a mortgage of 50,000.

You've been paying down that mortgage for the last 8 years and have reduced that capital sum over that time. Local authority Interest rates have also gone down a lot over that time.

You've been paying rent to the council on the value of their half. This half gets valued every year and can go down as well as up with the value of properties. The councils half of the property is certainly worth more now with the recovery of the housing market. You are not paying any money off the councils half you are only renting it. If you don't buy out the council you will finish your mortgage at the end of the term and still have to pay rent every month for the rest of your days.

Buy the council out, asap. If you can't afford a lump sum ask them are they giving out mortgages to buy out the shared ownership mortgages. A lot of councils are doing this!. You really should have already have bought your rented equity out. The scheme was only a stop gap to help people get on the property ladder