Eligability for secured loan

Deva2005

Hi all,

I hope this is in the right place...just looking for some advice..

Currently own 30% of a shared ownership property, my 'credit score' is around 500 (low) and I am in the position of needing to get a new car.
I have been declined for car finance, but I am wondering if I would have any issues using my share of the house against a secured loan?

Just wondered if anyone has had similar experience or just has some advice they might be able to offer?

Thanks in advance
David

Caz3121

when you say you own 30%, do you mean wholly without a mortgage
If a mortgage...how much difference between the value of the 30% and the outstanding mortgage
there needs to be enough equity to secure it against

Deva2005

I put down a sum of money equal to 30% of the value of the property. At the moment, I am only paying rent to the housing association for the difference. The amount invested was approx £60k, due to increase in value of house, my share is now worth approx £75k

Hope this helps?

Thanks a lot
David

Deva2005

I put down a sum of money equal to 30% of the value of the property. At the moment, I am only paying rent to the housing association for the difference. The amount invested was approx £60k, due to increase in value of house, my share is now worth approx £75k

Hope this helps?

Thanks a lot
David

jonesMUFCforever

You would (IMO) need to get the permission of the majority holder of the property to agree - in this instance I can't see them doing it.

Deva2005

Actually, I have been recommended by the housing association to approach Halifax over this, I was just wondering if anyone had any ideas about the chances of succeeding with the application given the lowish credit score....

DCFC79

david.richards27 wrote: »

Actually, I have been recommended by the housing association to approach Halifax over this, I was just wondering if anyone had any ideas about the chances of succeeding with the application given the lowish credit score....

Who knows but unfortunately your credit score is not used in the decision, lenders don't even see it. Your credit history is used in addition to what information you give in the application.

Deva2005

So it goes down to the credit report and then the information about work etc...is that right?
And having a lot of equity in the house does not have an effect in the decision making process?

Playing_with_Fire_2

Have you thought about whether this is really the best option? You would be adding to the risk of losing your house for a car. Are you thinking of a new new or new to you car? Depending on how long you've had the mortgage you may be able to extend the mortgage (borrow more against the rising price and/or your payments), rather than add a second loan. Have you had problems with paying back credit in the past?

If you had been successfully paying the mortgage for a couple of years, and were looking for a functional car to get you to work, I could imagine the lender being sympathetic (although their hands will be tied with the new affordability checks).

Deva2005

Thanks for the comment, actually, there is not a mortgage element in this equation. I invested the money into buying the share, and have not taken a mortgage on the rest yet. Just paying rent monthly, and keeping up nicely for the pasy six years.

This will not just be for a new car, but also for investment into a masters course to improve my qualifications and earnings, to allow me to take a mortgage for the rest of the house...

..i just hope that I can raise the money via this secured loan and I wil not be wasting my time in going through the process.

Are lenders more approachable when there is an option to secure against?

Clive_Woody

While the credit score itself is largely irrelevant I have to ask are there obvious reasons why this is so low (CCJs, missed payments, late payment, not on the electoral register, bankruptcy, etc)?

Often folk are coming on here with terrible records of repaying debt and still seem to get "scores" of 800+ so to get near the 500 mark suggests your credit file has something not good at all on it.