Shared Equity Mortgage: Meaning, Pros and Cons, FAQs

A shared equity mortgage allows a borrower and a lender to co-own a property, with the borrower required to occupy it. Upon sale, equity is divided based on contributions, and both parties share any losses. This arrangement is beneficial for homebuyers in high-cost markets, providing access to properties they might not afford alone. It also offers tax advantages for lenders. Programs exist to assist low-income and first-time buyers, and family members can participate to avoid gift taxes while investing in property.