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Looking to get shared ownership mortgages with bad credit? Our mortgage advisors are here to help you secure the right product for your needs, whatever your circumstances.

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Finding The Best Bad Credit Shared Ownership Mortgage Options For Your Circumstances

Looking to get shared ownership mortgages with bad credit? Our mortgage advisors are here to help you secure the right product for your needs, whatever your circumstances.

A poor credit report is an issue that can considerably limit your financial options. It can affect your eligibility for a loan, credit card, or mortgage and even be restricted to a lower credit limit. That said, bad credit shouldn’t discourage you from finding ways toward home ownership. Fortunately, the government recognises people’s challenges and presents various solutions to poor credit issues. One such solution is bad credit shared ownership mortgages.

However, there may be different considerations for people with poor credit ratings. Still, it’s an excellent chance to get back on the property ladder. If you’re struggling to find a mortgage lender that will offer shared ownership mortgages, or you’re confused about whether a shared ownership mortgage is right for you, then work with us at When The Bank Says No for all your mortgage needs.

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What is a Shared Ownership Mortgage?

Shared ownership mortgages have been around for quite some time as a consequence of the shared ownership scheme. This is a government scheme that helps previous homeowners or first-time buyers who can’t afford the full cost of a home but are keen to get on the property ladder.

The idea of a shared ownership mortgage is to let customers purchase a portion of the property and rent the rest. People also call this scheme the “part buy, part rent” mortgage.

This type of mortgage allows you to buy between 25% to 75% of the property. You’ll then be paying a reduced rent until you can pay off the remaining portion you don’t own. So, if you start with a 25% share of the property, you’ll pay rent for the remaining 75%. This status will stay until your circumstances change and you can afford a bigger mortgage.

The good news is that you can slowly work your way up until you fully own the property. This way, you can pay rent on a home you have a high chance of possessing in the future!

Currently, the scheme offers newly built and existing houses through a shared ownership resale scheme. People with disabilities can also choose homes to fit their specific needs.

It’s also a good idea to contact your local housing association to find out if this scheme is available frequently in your area and about the success that others have had with shared ownership mortgage lenders in the past.

What are the advantages of Shared Ownership Mortgages?

There are several advantages to shared ownership mortgages. And if you qualify for one, you can enjoy these benefits until you become a fully-fledged homeowner.

  • Households with low income are more likely to get approval for shared ownership mortgages.
  • Deposits in shared ownership properties are lower as you’ll only be paying for the share price of the house.
  • Rent should also be lower than the market rate in your area, as you’ll only be paying for the portion retained by the house association.
  • Selling your portion of the shared property is always possible, though you may have to inquire with your landlord beforehand.
  • Staircasing options allow you to work your share portion from 25% to 100% or until you fully own the property.
  • You can decide when to move up the staircase, which is convenient for low-income families or individuals.

Finally, if you applied for a shared ownership mortgage in 2022 and beyond, lease agreements include an initial repair period of 10 years. It means the landlord will be responsible for some repairs and maintenance for a decade if you own less than 100% of the property.

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When you think you’ve hit that brick wall and have all but given up hope of finding mortgage finance, When the Bank Says No are here to turn your ‘No’ into a ‘Yes’. We have access to a range of specialist lenders who are willing to help those that the High Street banks just won’t touch. Get in touch today and see how we can turn your dreams into a reality.

What are the disadvantages of Shared Ownership Mortgages?

We understand how a shared ownership mortgage can sound tempting. However, it’s essential to note that there are still drawbacks to this housing remedy.

  • Shared ownership properties will remain in leasehold, so you’ll still pay for ground rent regardless of your share size.
  • Like most lease agreements, landlords will limit the number of changes you can make to the shared property.
  • If you have a smaller share size, the less benefit you’ll receive if the property increases in market value.
  • The price you pay when buying additional shares can increase depending on the current house prices.

Another disadvantage to shared ownership is the complicated process when selling. If you don’t yet own the house, the landlord has the “right of first refusal” to sell it to anybody they want. However, you’ll still have the chance to sell the property if the landlord fails to find a buyer within the given time, usually around 6 to 8 weeks.

Can I apply for Shared Ownership Mortgages with a bad credit history?

Will bad credit affect your suitability for shared ownership mortgages? Not necessarily. You can apply for shared ownership mortgages even with a poor credit rating. However, you may find securing a mortgage more challenging than when you have perfect credit. Relying on mortgage brokers like When The Bank Says No could help you find appropriate mortgage lenders quicker.

The issue with bad credit is it usually raises a red flag for lenders. Poor records like missed mortgage payments, country court judgments, and bankruptcy mean more risk to the lender.

That said, while flaws in your credit history feel like a gloomy scenario, you’re not out of options yet! Sure, it might reduce your lender options, but there’s still mortgage brokers out there who can help you find specialist lenders willing to help you with shared ownership mortgage funding.

Over the last few years, specialist lenders have been entering the market, many of whom are willing to assist with bad credit mortgages. These specialists often cater to the consumer needs that mainstream lenders overlook. These companies specialise in financially more difficult situations, including adverse credit, and will aid you in making your application more acceptable.

We’ll provide you with expert mortgage advice to overcome this snag and help you find an appropriate lender for your needs. Contact us and let one of our mortgage experts help you get on the property ladder.

Bad Credit Shared Ownership Mortgages FAQs

Who is eligible for Shared Ownership Mortgages?

Most of us dream of owning a home of our own. However, the government designed shared ownership mortgages to cater to people under specific circumstances.

That said, there are prerequisites and eligibility requirements you should meet before you can apply. Here are some of the general criteria for shared ownership mortgages:

  • An applicant must be 18 years of age or above.
  • An applicant must be a first-time property buyer.
  • An applicant outside London should earn less than £80,000 a year.
  • An applicant in London should earn less than £90,000 a year.
  • An applicant who can’t afford to pay for a new home.
  • People with no property inside and outside the country.
  • People who are currently living in a shared ownership property.
  • People that are renting a housing association house.

If you meet one or more of these criteria, you should be able to apply for a shared ownership mortgage. Although it’s worth noting that some lenders could ask for your credit history.

Lenders will also analyse your ability to afford the mortgage payment. In fact, it’s one of the major factors they look at as they’re legally obligated to ensure you can pay.

To do this, they’ll examine your income and expense habits. As such, experts recommend dropping unnecessary subscriptions a few months before you apply for the mortgage.

Luckily, mortgage lenders are usually lenient with underwriting. So if you have a bad credit issue but can afford to pay, it’s best to speak with a mortgage specialist and discuss your options.

Other eligibility factors include your age and the property type you want to purchase. Staircasing options and loan-to-value ratios will also play a role in your eligibility. 

You’ll need to deposit a small amount to get started with your shared ownership mortgage. The average deposit size ranges from 5% to 10%, calculated from the property share.

So, say you bought a 50% share in a £200,000 house. This purchase would cost you £100,000 in total and would require you to deposit 10%, which is £10,000. However, it’s usually the case for lenders to ask for higher deposit amounts if you have a poor credit history. They typically demand 15% or more as a deposit from applicants with credit issues.

It’s also highly likely that lenders will ask for higher interest rates for your loan. But, if you did gather a bigger deposit for the property, you can reduce the loan amount and interest rate.

A larger deposit decreases the loan-to-value ratio, which means the risk lenders take transacting with customers. Plus, it gives you access to a broader range of lenders.

Getting a shared ownership mortgage can be challenging for individuals with poor credit files. Your chances of getting accepted can depend on the type of credit issues you have.

County Court Judgment (CCJ)

A county court judgment is an order issued against debtors who fail to settle their debts. Creditors can file a CCJ against you if they think you have no intention of paying.

A CCJ in your credit file can be a crucial factor. Mainstream lenders can take court orders as a sign of your inability or unwillingness to settle payments for debts. That said, some lenient lenders can also consider the amount involved and the time of the CCJ. An old CCJ rarely affects an application for a shared ownership mortgage.


A default in your credit record means you failed to pay a bill. This issue exposes you to legal claims and can limit your future access to credit. Like a CCJ, defaults can reflect poorly on your mortgage application. Lenders can accept or deny your mortgage depending on the number of defaults in your record.

The awful news is that defaults will stay on your credit file for six years. And these flaws will remain in your credit history regardless of whether you paid the bill.

Individual Voluntary Arrangements (IVA)

The individual voluntary arrangement is a legal agreement between creditors and debtors to pay the owed amount at an affordable rate. It’s a typical move for businesses to avoid bankruptcy.

Like defaults, an IVA will remain in your credit record for six years. And during this period, it can restrict your expenses and ability to borrow money. Lenders will typically examine your payment history with your IVA. Excellent payment history can help improve your credit score as lenders pay more attention to recent credit records.

Late Payments

Late payment records are another common credit issue. Due to hectic schedules or unexpected financial difficulties, many people may unintentionally skip payments. However, lenders typically consider late payments a minor problem. Thus, it shouldn’t reflect poorly on your credit history long as it’s not recent and recurring. 

So, a single instance of a late payment record from months ago shouldn’t negatively impact your application for shared ownership mortgages.


Companies and individuals declare bankruptcy when they can no longer repay their debts and obligations. And this mark in your credit file can hinder your ability to obtain a mortgage.

However, you should know it’s still possible to get back on track after bankruptcy. You just need to find lenders specialising in bad credit problems to help you.

Bouncing back from bankruptcy can be a daunting task. So give us a ring, and When The Bank Says No will assign expert advisors to tackle your credit problems with you.

Applying for a shared ownership loan will take four easy steps. Here’s a quick breakdown of the steps you need to do to apply for a shared-ownership home:

Step 1: Check for your eligibility to apply

First, ensure you’re eligible before applying for a shared-ownership mortgage. It involves your need for home ownership and inability to afford larger house mortgages.

Check the list we presented above for the criteria for eligibility.

Step 2: Find a house you want to purchase

If you pass the criteria for a shared ownership mortgage, you may start looking for a home to buy. To do this, contact organisations selling shared home ownership in your area. Housing associations and local councils usually put up advertisements for shared ownership homes. Homebuilders also do the same on their websites and property development areas.

After contacting these institutions, they’ll ensure your eligibility and send information about their shared ownership mortgage. They’ll arrange a viewing and determine your capacity to pay.

Step 3: Reserve the house of your Choosing

After deciding if you’re eligible for the mortgage, you may reserve the house of your choice. Reservations usually cost around £500 and are paid to the landlord. Shared ownership house reservations mean no one can reserve it for a set period. You can ask your landlord about how much time reservations allow before paying.

One advantage of reservations is that the fee will be taken off the total amount if you decide to buy the property. However, you won’t get a refund if you don’t purchase the property.

Step 4: Look for legal professional assistance

The final step to securing your property is choosing someone to do the legal procedures. When payment is made, you’ll need help transferring property ownership from the seller to you.

You can ask for assistance from licensed conveyancers or solicitors. These experts understand mortgage language better, and they’ll explain the terms and conditions of the lease to you.

How to improve my chances of getting accepted for Shared Ownership Mortgages?

A poor credit file can become a significant headache when applying for shared ownership mortgages. Even though a shared ownership mortgage with bad credit is an option, poor credit can still prove problematic. So you may need to freshen your credit report to improve your eligibility.

Clearing outstanding debts is one of the best ways to go. Take your CCJ, defaults, and IVAs out of the way before considering shared ownership loans.

If you have a problematic credit file, it’s a good idea to talk with a specialist mortgage broker. When The Bank Says No has no shortage of experts to bring you closer to your dream home.

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