Bad credit, shared ownership!

kj9322

THIS IS MY FIRST POST, SO SORRY ABOUT THE LENGTH. I HAVE SEEN NEGATIVE COMMENTS, ON SHARED OWNERSHIPS, WHICH I DON'T NEED TO HEAR... ALL I NEED IS ADVICE!

I am looking to purchase a shared ownership property. The value is £18k, for a 25% share, for which I would need a £15-16k mortgage. I am due to start a new job, at BT, were my basic salary is £18k. This is before tax, with another 10% available in bonuses. After 9 months, my basic wage will rise to £20k. Again, this is before tax, with another 10% available in bonuses.

I do have adverse credit, with debts of around £1500, which are being paid off. The defaults are phone bills, a catalogue and with Virgin Media. A phone bill was ran up by a family member, as they were out of work and needed to use a phone to search for self-employed positions. They have promised to pay this back, as soon as they can. The catalogue was a similar situation, which I have decided to start paying back myself. After finding out my girlfriend was pregnant, I was given the opportunity to move back home, but sadly she miscarried. I was in the middle of cancelling my Virgin Media, but due to the miscarriage and losing my job, I forgot all about it. I am about to set up a payment plan for this. The last phone bill wasn't paid, due to EE demanding £100 for internet charges, even though I had an internet lock. The agreed I had the lock and couldn't see what the charges were for, but still demanded it. I didn't have the £100 and had to leave the bill.

My idea is, if I can get a mortgage on the shared ownership, my monthly bill will be up to £150 cheaper than the average rent prices. The rent, for the other 75% is only £130, so with a mortgage of £200, I will be saving £100-150 on the average local rent. This will allow me to pay my debts off, within the next year, given I have just started a new permanent position. So, I would be able to increase my credit rating, whilst increasing it by having a mortgage.

I know that, due to my circumstances, I am all but certain to end up with negative equity. I have received quotes of a repayment of £25k, for the £15k mortgage. The property will never be worth this. But, that is only a loss of £10k, over say 15 years. Over that 15 years, I would also pay £23.4k in the 75% rental fees. So, an overall loss or rent would be £33k, over 15 years. This equals out to £2.2k a year, which is far below the average rent of £5.4k. Also, at the end of the mortgage, I would have the £18k share, which I could sell or sit on. This £18k could drop, but my idea is to modernise the property, so the value doesn't move much.

So, my point is, has anyone ever secured a shared ownership mortgage with bad credit? I know I will lose money in the property, but it will be less than what I would if I rented. If I rent, I will only be able to repay the minimum on my defaults.

csgohan4

Search for shared Ownership on this forum and you will see the cons of these scheme


e.g:
https://forums.moneysavingexpert.com/discussion/5416679


Your gains are minimal compared to owning a home and maintaining it. There's no LL to cry to when your need a boiler replaced or windows replaced e.t.c