Looking for a Shared Ownership mortgage. If you’re concerned that having bad credit will prevent you from obtaining a shared ownership mortgage, read our Complete Guide to Doing So.
Since we are aware that everyone’s circumstances are unique, we work with mortgage brokers who are authorities in a variety of mortgage-related fields. Ask us a question, and we’ll find the right expert to assist you.
4. Our clients adore Online Mortgage Advisor, giving it 8 out of 5 stars on Trustpilot, Feefo, and Google.
Which lenders have you already tried?
Select the tiles below to continue:
Author: Pete Mugleston – Mortgage Advisor, MD
We want you to have complete faith in our service and know that you’re getting the best available rate and the highest likelihood of mortgage approval given the unpredictable nature of the mortgage market.
Get in touch with us and we’ll put you in touch with a Specialist who will provide you with the best advice for you and your situation if you’re worried or unsure of what to do next.
When a person has bad credit and wants to purchase a home, shared ownership is frequently very helpful. It could be the helping hand you need to get on the property ladder if you’re having trouble saving up a deposit or getting approved for a mortgage for the full amount you need.
This article will outline how poor credit can impact your application, how to strengthen it, and why speaking with a specialist broker will help you avoid applying blindly and end up doing more harm to your credit files.
Can you get a Shared Ownership mortgage with bad credit?
Yes. A government program called shared ownership may be able to assist people who want to buy a home or move but are having trouble saving up a sizable down payment and are okay with co-owning their house.
Poor credit does not pose a barrier to enrollment in the program. However, things can become slightly more challenging if you need to obtain a mortgage after being accepted for a Shared Ownership property.
This is due to the fact that having poor credit makes lenders wary that you might have trouble making your payments, which may limit your borrowing options. But even if you have serious adverse information on your credit files, there are many lenders out there who will consider your application.
Speak to a Shared Ownership mortgage expert
Ask Us A Question
Since we are aware that everyone’s circumstances are unique, we work with mortgage brokers who are authorities in a variety of mortgage-related fields. Ask us a question, and we’ll find the right expert to assist you.
Typically, a Shared Ownership mortgage requires a deposit of at least 5%. However, if you can put more money down, you can lower your loan amount and loan to value (LTV) ratio, which will give you access to more lenders. You might be qualified for more mortgages as a result of this.
A 100% Shared Ownership mortgage is possible, but they are difficult to obtain with bad credit.
Because lenders are required by law to determine whether you can make the repayments, affordability plays a significant role in their decision. Most experts advise that you, ideally, cancel any unnecessary subscriptions at least three months before applying as they do this by looking at your income and expenses.
Fortunately, bad credit mortgage lenders typically employ a flexible underwriting process. To learn more about your options, talk to a bad credit mortgage broker if your credit history is preventing you from getting a loan but your affordability is sufficient.
Other criteria to think about are:
Age – Most lenders have an upper age limit for borrowers. This might mean you could face rejection with some, not because of your bad credit per se, but because the shorter borrowing period and higher rates make a loan unaffordable. Property type – Rarely an issue with Shared Ownership properties, but it’s worth keeping in mind that some providers won’t lend on anything other than a standard construction bricks and mortar home. Staircasing – This refers to the practice of increasing the amount of the property you own over time. Some lenders will not approve a mortgage if there are restrictions on how much of the property you can buy – so check the terms and conditions carefully. Loan to value – For Shared Ownership, this refers to the value of your share of the property. Lenders may set a maximum LTV for a Shared Ownership property or for anyone with more severe credit issues such as CCJs or bankruptcy. Were so confident in our service, we guarantee it.
We understand how crucial it is for you to have complete faith in our abilities and know that you’re getting the best possible chance of getting your mortgage approved at the best rate. Where others can’t, we promise to get your mortgage approved, or we’ll give you £100*.
How to get a Shared Ownership mortgage with bad credit
Follow these recommendations to increase your chances of being approved if you’re thinking about applying for a Shared Ownership mortgage but have poor credit.
Step 1:
Making a budget is essential to ensuring that you have money set aside for a deposit, moving expenses, and other costs like legal fees and stamp duty.
Be ruthless but realistic. Get rid of wasteful spending, but be honest with yourself about what you’re willing to give up.
Check your credit reports
You can easily order copies of all of your credit reports online. And it’s worth taking the time to do so. It will not only help you understand the criteria that potential lenders will use to evaluate your application, but it will also help you resolve any inconsistencies.
Speak to a bad credit mortgage broker
Borrowers with bad credit sometimes make this their first step. Before they start gathering evidence, they frequently get reassurance from talking to a broker. Additionally, a letter of understanding paints a clear picture of the borrowing capacity.
They can help you package your application to increase its chances of being approved by quickly identifying the best lenders to contact after fully comprehending your circumstances.
Make an inquiry if you’d like to discuss your options with a professional, and we’ll put you in touch with them.
Mortgage rates are subject to change at any time, but as of the date of this article (16 November 2022), those with minor credit issues and a 5% down payment may be qualified for a fixed rate of between 5% and 6%.
Higher rates are likely for borrowers with more severe bad credit. Get impartial advice before choosing between a fixed rate and a variable rate given the current economic climate.
Rated excellent by our customers
Depending on the severity of the issues, when they occurred, and whether they are now resolved, a number of mainstream lenders will consider bad credit mortgages for Shared Ownership.
For instance, Barclays, Halifax, and Santander might take into account your application if you have a few credit card late payments but not if you have a recent CCJ.
You are more likely to require a specialized lender if your credit issues are severe and recent.
Get matched with a bad credit mortgage broker
Shared Ownership mortgages and bad credit go hand in hand, so don’t let that stop you from applying. But it’s crucial to get the right guidance the first time because rebuffed applications can damage your credit reports further.
We work with brokers who are highly knowledgeable about the market for bad credit mortgages and have dependable connections to Shared Ownership lenders. Before limiting your options to the best lenders for you, they will evaluate your unique situation.
In some situations, they can also serve as an advocate to help close a deal.
Based on your situation, our broker matching service will match you with the most suitable broker. Call 0808 189 2301 now to be matched with your ideal broker, or send an online inquiry.
What credit score do you need for a Shared Ownership mortgage?
There isn’t a single, universal credit score, and some lenders don’t even consider credit scores when reviewing applications. However, if you have poor credit, it’s frequently preferable to speak with a specialist lender who evaluates applications on an individual basis rather than by applying a numerical score.
Do Shared Ownership mortgage lenders do credit checks?
Yes. All mortgage lenders run credit checks, but some are more flexible in how they evaluate the data.
Ask a quick question
We can help because we work with mortgage brokers who are knowledgeable about shared-ownership mortgages because we recognize that everyone’s circumstances are unique.
Pete, a guru in all things mortgage-related, began his career during the credit crunch. Pete found great success in going above and beyond to find mortgages for people who many others considered lost causes because there were many people in need of assistance and few mortgage providers lending. He founded Online Mortgage Advisor with the single goal of assisting as many clients as possible in receiving the appropriate advice, regardless of need or background, as a result of the experience he had gained and his love of assisting people in achieving their goals.
Pete’s prominence in the field as the “go-to” for specialized financing continues to increase. He is frequently quoted in and writes for both local and national press, as well as trade publications. He also serves as the sole mortgage expert for LOVEMoney and has a regular column in Mortgage Introducer. Pete also writes for OMA of course!.
*As of the most recent time of writing, the information in this article is accurate based on our research. For the most up-to-date information, check with one of the advisors we work with as lender criteria and policies are subject to frequent change. The information on the website does not constitute financial advice because it is not personalized for each individual reader. All of our advisors are fully licensed to provide mortgage advice, and they only work for companies that are approved by and subject to the regulation of the Financial Conduct Authority. Any advice they have will be tailored to you and your needs.
Certain buy-to-let mortgage products are not subject to FCA regulation. Think carefully before securing other debts against your home. If you don’t make your mortgage payments on time, your home could be repossessed because a mortgage is secured against it. Your home’s equity release will be secured by it as well.
Find the ideal mortgage broker to increase your chances of approval no matter what your circumstances are.
At OnlineMortgageAdvisor we know that everyones circumstances are different. That is why we only employ specialized brokers who have years of experience obtaining mortgage approvals.
Specialists in shared ownership mortgages Higher chance of approval We dont charge a fee No impact on credit score Mortgage Approval Guarantee – or £100 back* Rated excellent on Trustpilot, Feefo and Google 
Call us at 0808 189 2301 if you have any questions.
Register to receive updates on the market, details on new lending products, and advice from our experts.
Signing up to hear more from us may be the best decision you ever make for your next mortgage, whether it’s to lower your rates or increase your chances of approval.
Important news about the home market New lender products Specialist tips and advice Improve your chances of mortgage approval
Call us at 0808 189 2301 if you have any questions.
FAQ
Can you get a mortgage with a credit score under 500?
FHA mortgages are not available to applicants with credit scores below 500 at the minimum decision level. Those who use the FHA 203(h), Mortgage Insurance for Disaster Victims, are eligible for 100% financing from the FHA with no down payment necessary if their credit scores are 500 or higher.
Can a low credit score prevent you from getting a house?
Government data show that lenders have been lending to buyers with below-average credit scores more frequently since 2018. Lower credit scores, however, may have an impact on your mortgage rate, associated costs, or the amount of the required down payment.
Can one person have bad credit on a mortgage?
It is possible to purchase a home with one spouse having poor credit. But it also means that you will either have to put up with higher interest rates, wait to raise your credit score, or apply for a loan alone.
What are the limitations of a shared ownership?
What are the drawbacks of shared ownership? The main drawback of shared ownership is that since you don’t fully own the property, you still have to make monthly rental payments. The other major disadvantage is that you are also responsible for paying all of the fees associated with being a tenant.