A method of property purchase in partnership with a builder (vendor) who offers an incentive for the prospective buyer by accepting, say, 95% of the purchase price to be paid on completion and the other 5% to be paid at some stated time in the future. The builder will normally register a second charge on the property until the remaining 5% has been paid. The 5% owing may be on an interest free basis or interest may accrue and be added to the debt. Unlike shared ownership, there is not normally a monthly payment commitment.
a method of property purchase in partnership with a builder which offers a deposit interest free or as a deferred loan as an incentive for you to buy.
A scheme whereby an individual purchases only a percentage of the property and the developer owns the remaining percentage. Rent is paid to the developer on the remaining percentage.
A scheme operated by a developer where the developer retains a percentage equity of around 10% in the property. Thus the developer holds a second charge over the property. The 10% owing may be interest free or may incur interest and be added to the total amount owing on the property.
A scheme whereby a person purchases only a percentage (usually the majority) of a property; the remaining percentage being held by a developer or builder, usually giving the purchaser the option to buy the remainder at some point in the future. The builder/developer will normally register a ‘second chargeâ€(tm) on the remaining portion until such time as it is purchased. Depending on the deal, the remaining portion could be on an interest free basis, or it could attract interest which is added to the sum paid by the purchaser when they buy the extra portion.
There are two main forms of this; the first is where a lender assists with the purchase of a property by retaining an equity interest in the the property of, say, 50%. The second is a scheme operated by a developer where the developer retains a percentage equity of around 10% in the property. Thus the lender or developer holds a second charge over the property. The lender or developer recovers the value of their share on sale of the property.
This allows a borrower to purchase a new property in partnership with the builder. Often the builder will allow the borrower to purchase say 90 or 95% of the property now and pay the balance off say in 5 years time. The builder will register a second charge on the property until this balance has been paid. The 5 or 10% owing maybe interest free or interest may be allowed to roll up and added to the debt. Obviously this can benefit some borrowers but the consequences of not being able to take on the additional debt in the future are serious. Financial advice must be undertaken before proceeding with this type of mortgage.
A means of helping people into home ownership through the purchase of an equity share in a property with the remaining share being held by, for example, a social landlord who would also benefit from any increase in the equity value.