wanting a shared ownership mortgage-bad credit rating

nimamaj25

Hi all
im a wannabee first time buyer who is aiming to get a mortgage on a shared ownership sceme, most likely 25% to begin with.I saw a mortgage advisor today and she says I will most likely need a deposit of 2k plus legal fees taking it up to 4k which is not a problem.
However I have today for the first time seen my credit history on noddle, im 27 now and cos of me being abit reckless when I was young and not thinking about the consequences i have a cresdit score of 1 out of 5, theres 3 debts on there, one for £190 which i can pay off this week, one for £350 which i can also pay off and another is a catalogue for nearly 2k!! which is going to be an issue. i was a stupid boy back then and am now paying for the mistakes I made when younger, my question is if i pay 2 of them debts off is that going to improve my credit score at all straight away? i have a phone contract which I got 6 months ago so I thought my credit must be ok, clearly I was wrong.

I have a good job now with earnings on 19k a year so I can easily afford the repayments on the part buy part rent scheme, I need to move out soon as the house im living in is up for sale, (i live with parents) if i started renting then i will never be able to afford to get onto the property ladder,

How likely am I to get a mortgage based on my current situation?
thanks alot in advanced
I am furious with myself right now

gazfocus

I'd say you're extremely unlikely to get a mortgage to be honest.

I'm talking from experience. We were looking at shared ownership and went to see a mortgage adviser. I have one default on my credit file from 5.5 years ago and the mortgage advisor spoke to a few lenders including Leeds BS and said I would not get a mortgage while the default is on my file.

She did say that there are not many mortgage lenders that will consider lending on a shared ownership property so the fact that you have adverse credit history makes it even more difficult. If you were to want to buy 100% of a property, you'd stand a better chance as there are far more lenders to pick from.

However, I would also seriously consider your deposit. When our mortgage advisor went through options with us, their were a few lenders at 90% LTV and a load more at 85% LTV. I would suggest you'd have a hell of a job at 95% LTV (which is what it sounds like if you're talking 2% deposit for 25% share)

nimamaj25

thankyou mate, I appreciate the advice

gazfocus

No problem...I know exactly how you feel though. I was nearly in tears when I was told we had no chance.

Can you not move with your parents when they move? It would let you save more for a deposit.

nimamaj25

gazfocus wrote: »

No problem...I know exactly how you feel though. I was nearly in tears when I was told we had no chance.

Can you not move with your parents when they move? It would let you save more for a deposit.

Its my mum i live with, shes moving in with her bf who only has a 2 bedroom house, his daughter has the other room, my own fault for being stupid when i was younger, never gave a thought for the future back then

poppy10_2

Shared ownership is a scam, preying on the financially naive such as yourself. Avoid.

brit1234

Make sure you you read about shared ownership before you go any further. The scheme has many bad points and has stopped being funded by the government.

Knowledge is power.

gazfocus

Ignore all the idiots spouting that shared ownership is a scam...they're like a broken record! Shared Ownership definately has it's plus points.

brit1234 & poppy10 - Please don't let this turn into another of your boring shared ownership debates!

brit1234

gazfocus wrote: »

Ignore all the idiots spouting that shared ownership is a scam...they're like a broken record! Shared Ownership definately has it's plus points.

Gazfocus are you seriously telling the buyer to ignore all the bad points?

Come on what is wrong with the buyer having a look at the bad points as well to come up with an informed choice? This is after all is a money saving forum

gazfocus

brit1234 wrote: »

Gazfocus are you seriously telling the buyer to ignore all the bad points?

Come on what is wrong with the buyer having a look at the bad points as well to come up with an informed choice? This is after all is a money saving forum

No, I'm telling the OP to ignore the people spouting in every shared ownership thread about shared ownership being a scam.

Shared Ownership schemes are a good idea IF you go into them with eyes wide open.

samtoby

I have been to see an advisor I have a rubbish history.

It is all clear now but I am still sat with 2 defaults (cleared) and a CCJ (cleared for Utilities in 2007)

I was advised that the mobile phone was helping me (contract and my bank account which reports) but I needed some evidence I was paying credit of some kind.

As soon as it showed I was paying things off and managing well (paying over the minimum) my credit seems to be getting better. I applied for a Very account and I have bought little things and paid off in full. This is helping me.

I am saving 20k, going back to him and we will go from there. I think time is a healer.....thinking you have 2k on a catatlogue it would be best to clear that before looking for a mortgage as if you can not manage or pay that to clear it then for exmple that shows lenders that you are not able to manage debt as best as you could etc.

I now have a mobile contract, Very Account, bank account (over draft NEVER go overdrawn - but it reports n my credit record) and A Credit builder credit card. I am on the electoral roll too.

Clear up your credit record get some savings and revisit, I think is best. 20k is hard for me to save but I am working so hard. I am struggling but all I keep thinking it is all worth it. x