To qualify for this new shared equity scheme you must not have previously owned property either individually or jointly. You will be required to have a minimum deposit of 5% of the purchase price (subject to individual lender requirements) on a mortgage that must be a least 25% of the purchase price.
If you are applying for a joint mortgage, please note that one person must be a first-time buyer.
While the Scottish Government will have shared equity of your property, you will still own the property outright. Repayment of the equity share will only be paid back when you sell your home. You will not be asked for any monthly payments towards this and no interest charges will be made by the Scottish Government.
The Scottish Governments maximum contribution is £25,000 or 49% of the purchase price or valuation figure, whichever is lower.
Shared Equity explained
If you have never considered shared equity before and are not quite clear on what it means, here is an explanation.
Shared equity means that the cost of your properties purchase price is split with the Scottish Government. Your share will be through a mortgage and deposit, with the remaining share provided by the Scottish Government.
You will be required to pay this back on the sale of your property, but at any time you can increase your equity share.
Your deposit and mortgage will cover 85% of the home’s value when purchased, the Scottish Government will hold a 15% share on your property. When you sell your home you will receive 85% of the selling price and the other 15% will be paid to the Scottish Government.