The Shared Equity Scheme enables eligible buyers to purchase a brand new property, funded by an affordable mortgage with the assistance of an equity loan. The amount of the loan is between 25 and 50% of the value of the property, depending on the availability of the property and the financial ability of the purchaser. If you buy a Broadgate Shared Equity home, you will have a mortgage for less than the full purchase price of the property, but you will be the legal owner of 100% of your home.
In order for you to purchase a home through the Shared Equity Scheme you will need some savings that will cover the deposit. You must take out a first mortgage which along with that deposit will cover your agreed share. Broadgate will then provide an equity loan to fund the balance needed to make up the purchase price of your home.
For the first 3 years the equity loan is charged at an interest rate of 2% below Bank of England Base Rate and from year 3 onwards the loan is charged at Base Rate. Interest is collected on a monthly basis by direct debit. The equity share of the property is not revalued at any point during the term of your ownership.
The property, once allocated to the scheme will always remain a shared equity property. If you decide to sell your home you sell it under the same terms that you purchased it – your purchaser will have to be approved by the local authority and it will be sold on at the same percentages at which you purchased.
Broadgate will provide a new equity loan on the new purchase. Broadgate's entitlement to a share of the future sale proceeds is secured through a second charge on your home. This is done in the same way that your mortgage lender will secure its lending through a first charge on your home.
This scheme is only available to approved purchasers.
The following conditions apply to all applications to purchase a Broadgate shared equity property:
You must have a local connection to the area to participate in the scheme, such as work or family and applicants must seek approval from the local authority in order to make a reservation.
A range of properties is available for a 50% to 75% Shared Equity purchase. The percentage offered to you will be dependent on property availability and will be set according to your financial ability.
For the first 3 years the equity loan is charged at an interest rate of 2% below Bank of England Base Rate and from year 3 onwards the loan is charged at Base Rate. Interest is collected on a monthly basis by direct debit.
Once fixed the percentage you purchase cannot be increased until you have been in the property for 25 years then you may purchase the remaining percentages.
To reserve a property under the scheme the following procedure will apply:
Following written approval from the local authority our normal reservation procedure will apply; a copy of this is available from our sales centre.
All mortgage applications must be made through the assigned mortgage broker for Broadgate with regard to the purchase of homes under the Shared Equity Scheme.
You will be required to pay £250 reservation deposit at the sales centre which will be held on file for 7 days until you have mortgage approval in principal subject to valuation through our assigned mortgage broker.
Once you have paid your deposit, you will also require a solicitor to act for you; this must be in place within the 7 days you are waiting for your mortgage approval.
Once your mortgage has been approved your reservation will be processed and solicitors will be informed. The assigned mortgage broker will then proceed to make a full application for your mortgage and may require a payment from you for the survey fee.
Your next step is to instruct a solicitor to act for you on the purchase. He will require a payment from you once your purchase has been confirmed in order to apply for your local searches.
We would look for exchange of contracts within 6 weeks of your reservation and mortgage approval.
You will be required to pay a deposit on exchange of contracts; this will be a maximum of 10% of the purchase price of the property.
No further payment will be required unless you have ordered any Bespoke Extras for the property which will be payable before exchange of contracts.
Should the assigned mortgage broker be unable to secure you a mortgage within the 7 days the full £250 will be refunded to you and the property will be remarketed.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Click here to download an application form.
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