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Specialist Mortgage Advisors For Bad Credit Shared Ownership Mortgages.
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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Useful links to begin your Bad Credit Mortgage Journey
First Time Buyers
Bankruptcy
Getting a mortgage after bankruptcy can be difficult, but the property ladder can still be within your reach even if you haven’t been able to start building a good credit history. Talk to our expert mortgage advisors today.
CCJ
A County Court Judgement (CCJ) isn’t the end of your mortgage ambitions. Enlist the support of our expert mortgage advisors now.
Low Credit Score
Feeling low about your credit score? The right mortgage for you is just around the corner. Our expert advisors are here to help you find it.
We Have the Best Bad Credit Shared Ownership Mortgage Options For You
Looking to get shared ownership mortgages with bad credit? Our mortgage advisors are here to help you secure the right product for your needs, even with an adverse credit history.
A poor credit record is a factor that can seriously restrict your financial options. It affects your eligibility for a loan, credit card, or mortgage and will impact how much credit you are offered. However, bad credit shouldn’t discourage you from considering home ownership.
Fortunately, the government recognises the challenges of adverse credit, and has created various solutions to tackle poor credit issues and home ownership. One such solution is bad credit shared ownership mortgages.
A poor credit record always throws up some unique challenges. If you’re struggling to find a mortgage lender that offers 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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In order for us to assess your credit history and suitability for different mortgage products, you will need to check your file.
What is a Shared Ownership Mortgage?
A shared ownership mortgage, unofficially referred to as a “part buy, part rent” mortgage, works by allowing customers to purchase a portion of the property whilst renting the rest. They were developed on the back of the shared ownership scheme, which helps previous homeowners or first-time buyers afford the cost of a home to get on the property ladder.
This type of mortgage allows you to buy between 25% to 75% of the property and pay a reduced rent for the portion you don’t own. For example, starting with 25% share of the property, you’ll pay a mix of rent and loan repayment for the remaining 75%. This will be status quo until your circumstances change and you’re willing to get a bigger mortgage to increase your ownership share.
The good news is that you can slowly work your way towards owning the property in full, paying rent on a house you have a high chance of possessing in the future!
Shared ownership schemes are typically run by housing associations or local councils. It’s a good idea to contact your local housing association to find out what’s available in your area. They will be able to point you in the direction of shared ownership mortgage lenders too.
What are the advantages of Shared Ownership Mortgages?
We understand how a shared ownership mortgage can sound tempting, especially if you have a history of adverse credit. However, it’s essential to be aware of the drawbacks.
- Shared ownership properties will remain in leasehold, so you’ll still have to pay 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 even though you part-own it.
- The smaller the share size, the less benefit you’ll receive if the property increases in value.
- The price you pay when buying additional shares can increase depending on current house prices and the market value of your home.
- Selling a property under a shared ownership scheme can be complicated. The landlord has the “right of first refusal” to sell it to anybody they want. However, you’ll still have the option to sell the property if the landlord fails to find a buyer within a stipulated time, usually around 6 to 8 weeks.
Turning Your Nightmares Into Dreams
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, especially if you have a history of adverse credit. However, it’s essential to be aware of the drawbacks.
- Shared ownership properties will remain in leasehold, so you’ll still have to pay 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 even though you part-own it.
- The smaller the share size, the less benefit you’ll receive if the property increases in value.
- The price you pay when buying additional shares can increase depending on current house prices and the market value of your home.
- Selling a property under a shared ownership scheme can be complicated. The landlord has the “right of first refusal” to sell it to anybody they want. However, you’ll still have the option to sell the property if the landlord fails to find a buyer within a stipulated time, usually around 6 to 8 weeks.
Can I apply for Shared Ownership Mortgages with a bad credit history?
Will a bad credit rating affect your suitability for shared ownership mortgages? Not necessarily. Whilst some mainstream lenders will not consider you, there exist others who specialise in shared ownership mortgages for clients with adverse credit. When The Bank Says No can help you find appropriate mortgage lenders that consider you their perfect client.
Mainstream lenders make their money by making the safest bets, and adverse credit reports are considered too risky. Whether your credit is a result of missed mortgage payments, country court judgments, or bankruptcy – many mainstream lenders have a policy to reject you outright regardless of your current situation. But you’re not out of options just yet, our network of specialist lenders offering shared ownership mortgage funding is on standby for you.
These networks of specialist lenders are not accessible through the mainstream and instead prefer to partner with mortgage brokers like us. We are the middleman between you and the favourable terms that they offer, and we take on the heavy administration that mortgage applications typically involve to decrease the stress on you. Through our advice and expertise, you’ll find that mortgages go from complex to streamlined.
It is our job to provide the best mortgage advice on the market and make the entire process easy. 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 but for some people, the financial reach is just too far. The government designed the shared ownership scheme to cater to people who struggle to meet the lending criteria for a standard mortgage.
However, there are prerequisites and eligibility requirements you must meet before you can apply. Here are some of the general criteria for shared ownership schemes and mortgages:
- An applicant must be 18 years of age or above.
- An applicant must be a first-time 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 must be unable to afford to pay for a new home.
- An applicant must have no other property either in the UK or abroad.
- People who are currently living in a shared ownership property are eligible.
- People who are renting a housing association house are eligible.
If you meet one or more of these criteria, you should be able to apply for a shared ownership mortgage. However, if you have a bad credit record, you’ll still need to find the right lender to support a mortgage application.
What Other Eligibility Factors Are Important For Shared Ownership Mortgages?
As with any mortgage, lenders will analyse your ability to afford the mortgage payments. This is one of the major factors they look at as they’re legally obliged to ensure you can pay. They do this by examining your income and expenditure. Typically, mortgage lenders are usually lenient with underwriting even if you have a bad credit report as long as you can demonstrate that you can afford the monthly repayments. Other eligibility factors include your age and the type of property you want to buy, loan-to-value ratios, and staircasing options. It’s always best to speak with a mortgage specialist and discuss your situation before you make an application.
Do you need a deposit for Shared Ownership Mortgages?
You will need a deposit for a shared ownership mortgage. The average deposit size ranges from 5% to 10%, based on the property share. If, for example, you want to buy a 50% share in a £200,000 house, this purchase will cost you £100,000 in total and require a deposit of 10%, which is £10,000. However, if you have a poor credit report, lenders will often ask for higher deposit amounts, typically 15% or more. A poor credit history can also mean higher interest rates on your loan so our advice is always to put down the biggest deposit you can manage. A larger deposit decreases the loan-to-value ratio and lowers a lender’s risk. Plus, it can give you access to a broader range of lenders.
What credit issues affect eligibility for Shared Ownership Mortgages?
Getting a shared ownership mortgage with bad credit can be challenging. Your chances of being accepted can depend on the type of credit issues you have. Here are some of the most common bad credit problems.
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 a debt remains unpaid.
A CCJ in your credit file can be a crucial factor. Mainstream lenders view court orders as a sign of your inability or unwillingness to settle debts and manage money generally. However, some lenders will also consider the amount involved and the date of the CCJ. An old CCJ rarely affects an application for a shared ownership mortgage.
Defaults
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. Defaults stay on your credit file for six years regardless of whether you paid the bill.
Individual Voluntary Arrangements (IVA)
An individual voluntary arrangement is a legal agreement between creditors and debtors to pay an amount owed at an affordable rate. It’s a typical move for businesses to avoid bankruptcy but individuals can also use an IVA to manage accumulated debt. Like defaults, an IVA will remain on your credit record for six years. During this period, it can restrict your ability to borrow money. Lenders will typically examine your payment history with an IVA. An Excellent payment record 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. Typically, most lenders consider late payments a minor problem so they shouldn’t reflect poorly on your credit history as long as they are not recent and don’t recur.
Bankruptcy
Companies and individuals declare bankruptcy when they can no longer meet their debts and obligations. This is one of the most difficult bad credit events to manage and can seriously hinder your ability to obtain a mortgage. However, it’s still possible to get back on track after bankruptcy. You just need to find lenders specialising in adverse credit events to help you. Bouncing back from bankruptcy is 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.
How to apply for a Shared Ownership Mortgage?
Applying for a shared ownership mortgage takes four easy steps.
Step 1: Check Your Eligibility
Check the list we presented above for the eligibility criteria.
Step 2: Find A House You Want To Purchase
If you satisfy the criteria for a shared ownership mortgage, you can start looking for a property to buy. Search for organisations offering shared home ownership in your area. Housing associations and local councils usually advertise shared ownership homes. Homebuilders also do the same on their websites and in property development areas. They’ll send you information about their shared ownership deals, arrange a viewing and assess your eligibility.
Step 3: Reserve A Property
If you’re eligible for the mortgage, you can 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 the property for a set period while your mortgage application is processed. The reservation fee will be taken off the total amount if you go ahead and buy the property. However, if you decide not to buy the house, you won’t get a refund.
Step 4: Look For Professional Legal Advice
The final step to securing your property is choosing someone to manage the legal process. You can look for help from either licensed conveyancers or solicitors. These experts will be able to explain the mortgage conditions and the terms of the lease to you.
Improve Your Chances Of Obtaining A Shared Ownership Mortgage
A poor credit score is a significant headache if you want to apply for a shared ownership mortgage. Cleaning up your credit report can help improve your eligibility, and access more lenders potentially with lower interest rates.
Clear outstanding debts is one of the best things to do, if possible. Check your credit report for any errors, too.
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 who can help, and access specialist lenders to bring you closer to your dream home.
What Our customers say about us
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We feel so fortunate to have found WTBSN
We found WTBSN after landing in a really tricky situation. We were out of term on our current mortgage and our existing broker had exhausted all options to re-mortgage due to the complex nature of our holiday let property (Grade II listed, timber frame construction and above commercial). Working under considerable time pressure due to the financial penalties being imposed by the existing lender, Brian was relentless in his search for a solution that would allow us to refinance a property that was on face value mortgageable. Thankfully, he didn’t give up and nine months later, we completed on the re-finance. We feel so fortunate to have found WTBSN and would like to thank Brian and the team sincerely for going the extra mile. We couldn’t have done it without you!
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I will never use another mortgage broker in all my time In property, these guys are the best at communication, customer service and keeping you informed. They are a level above every other broker I’ve come across and they actually get things done.
Emma, Samantha & Ashley have been fantastic in assisting me with 2 mortgages now and they’re superb at what they do. I wouldn’t hesitate to reccommend them to anybody out there who needs a mortgage sorting.
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I have been dealing with Ben @ When The Bank Says No. He has been great!! Professional, kept us up to date the whole way and made the entire process so simple. I would most definitely use him again and have already passed his details on to a family member. Thank you for all your help.
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Thank you for your amazing support and service during a really difficult time in my life. 5* is just not enough to demonstrate the level of support received. These guys go above and beyond. A personal service, with kindness and compassion. I highly recommend. If you’re struggling with your mortgage, then have a chat to this team. I cannot thank them enough for everything they have done.
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