Can I Take a Secured Loan on a Jointly-Owned Property (Shared Ownership)?

Yes you can – but it may not be easy.

Since the beginning of the credit crunch in 2008, the number of lenders offering secured loans and secured homeowner loans for shared ownership properties has fallen significantly. And, those that are left have changed their criteria to make it tougher to get a loan.

This means there are less lenders offering secured homeowner loans on property you co-own (shared ownership) although they are still available, particularly if you have a reasonable amount of equity in your ‘share’ of the property.

Secured homeowner loans on shared ownership property work in much the same way as traditional secured loans. Secured loans allow you to borrow against the equity in your property (the value less any outstanding mortgages and secured loans). A shared ownership secured loan works in exactly the same way as if you owned 100 per cent of your home, but your loan will be limited to the total value of your share of the property.

So, if you own a 50 per cent share in your home but you only have a mortgage of half this amount, you will potentially be able to take out secured homeowner loan against the 25 per cent ‘equity’ you have in your home – even though you only own a proportion of the property’s total value.

A shared ownership secured homeowner loan will otherwise work in much the same way as a traditional secured loan. The interest rate will be based on a number of factors including the amount of equity you have available, your income and expenditure, any other loans you have, your credit rating and your ability to repay the secured loan.

You may also need the permission of the housing association (or the organisation which owns the remaining share in your home) before you take out a secured homeowner loan on your property.

To use your home to raise money at a competitive APR, please fill this homeowner loan form.