Shared Ownership & Bad Credit Mortgages

Shared ownership schemes have been introduced by the government as a way to give more people the opportunity to own their own home. The scheme is provided through housing associations and allows you buy a 25% to 75% share of your home, while paying rent on the rest of the property.

You should also be a first-time buyer or an ex-homeowner but unable to afford to buy a property outright. You should also be renting a council or housing association property to qualify.

If all of these criteria apply to you, the next step is to find a mortgage. The good news is that finding a shared ownership mortgage with bad credit is not especially tricky. When providers offer shared ownership mortgages, they tend to be more flexible than other providers in the market. They’ll often accept high loan to value ratios and a be willing to lend to people with bad credit. You’ll simply need to have a provable income to show you can afford the mortgage and rental payments, and usually only a small deposit.

There are even lenders who are willing to consider shared ownership mortgages with NO DEPOSIT at all, making this an excellent method of climbing the property ladder for those with bad credit. If you have no deposit and a poor credit rating you should expect to pay a higher rate, but with the help of one of our shared ownership and bad credit mortgage advisors you should still be able to find a competitive deal.

Bad credit right to buy mortgages

The right to buy scheme is available to tenants living in council properties in England (there are separate schemes in Wales, Scotland and Northern Ireland) with no special lending criteria involved in securing a mortgage. That means, if you’re eligible for the scheme, you can buy your property at a considerable discount.

To qualify for the right to buy, you must have lived as a council tenant for at least five years (this does not have to be continuous or in the same property). So, if you’ve lived in council, housing association or government department properties for more than 5 years, you’re eligible.

Many right to buy mortgage lenders allow you to use the discount offered by the right to buy scheme to contribute towards the mortgage deposit. In many cases this means you will be able to get a bad credit right to buy mortgage with no credit at all.

Many of the lenders that offer right to buy mortgages are high street lenders; however, there are one or two specialist lenders our advisors know of who will consider customers with an adverse credit rating. For more information, please enquire today and an advisor will scour the market on your behalf to bring you a range of options that suit your circumstances.

Bad credit guarantor mortgages

A guarantor is an individual, usually a family member, who is willing to provide additional guarantees to a lender on behalf of the borrower. This provides the lender with reassurance that, if the borrower doesn’t pay, the guarantor will be legally responsible for making the repayments and they will not be left out of pocket.

This type of agreement is common among prospective borrowers with bad credit looking for personal loans or other forms of unsecured borrowing, but it will usually have little impact on a mortgage. If a lender is unwilling to consider a certain level of bad credit, the addition of a guarantor will often make little difference to their decision. The key is to approach a lender who is willing to accept the appropriate level of bad credit in your particular situation, which is something our advisors can help with.

How can we help?

Please complete our enquiry form and a specialist mortgage advisor will be in touch to offer a free, no-obligation initial consultation before searching the market to find the right shared ownership or right to buy mortgage for you.

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