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October 1, 2007

Shared appreciation mortgages could be a good choice for first-time buyers

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by Kay Mitchell

Shared appreciation mortgages could be a good choice for first-time buyers

A shared appreciation mortgage allows you to borrow 25% of the value of your property at 0% interest, provided you agreed to pay the bank, upon your death or sale of the house, 75% of the appreciation in the price. Shared appreciation mortgages were introduced by the Bank of Scotland in 1996.

A spokesperson for Zen Financial Services have commented that shared appreciation mortgages could be an option for first-time buyers or those with poor credit.

Zen added that many lenders are providing such products like shared appreciation mortgages where, it’s not shared ownership, you still own the whole property, but the lender takes a share in the profit that the property makes.

The spokesperson concluded that those who live in expensive areas and first-time buyers could benefit from these types of products.


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