shared ownership

[tali122]

i understand the concept of shared ownership but are there any major disadvantages?, its occured to me (if im right in my thinking) that the more of the rent you pay i.e 75% rent 25% mortgage- you save an enormous amount in intrest saved- as i assume there is no intrest to pay on the rent?or have i misinterpreted something?

[Loosehead]

that's true but you're only buying a quarter of the house, you're renting the rest so you're that money is helping the owner of the 75%

[WoWo]

The disadvantages are that you only own a 25% share of the house, therefore if you sell you only get 25% of any profit. Many are structured so you take the loss rather than the scheme. Lets say you purchase for �100K, your share being �25K, if the house drops in value to �75K it's effectively cleared your money out. If you can to sell in many cases you would be liable for that short fall.

Also in that instance you would also find it difficult to sell becuase you don't acutall own all of the house.

[WoWo]

You don't pay tax on the rent but the rent is still significant enough to be similar to renting or buying in normal circumstances.

Also at the end of the 25 years you don't own the house only 25% of it. You would still need the money to purchase the other 75%.

[tali122]

thaks for replys - i thought that once i paid off all the rent -that the property would be legally mine