Shared ownership - poor credit score

Boxblue

Hi everyone
We are looking at the possibility of buying a house, we are first time buyers and have been looking at shared ownership. The benefit would be lower deposit and the ability to buy back chunks at a time in the future.
However we've recently finished a debt management plan and are now debt free but have a very low credit score. I have been told that we could probably get a normal mortgage but with a higher deposit needed because of our history but wouldn't get a shared ownership mortgage because of our poor score, has anyone any experience in this and can you confirm its a no go with bad credit score/history?
the whole idea of a shared ownership property is to help people get on the property ladder so it seems mad to me that they'd then make it ultra hard to get a mortgage to buy one! Surely if I only want to borrow 50% of a house then that should be easier to get than wanting to borrow say 90%?
Any one have any experience in this?

Thanks in advance
Joe

Thrugelmir

Boxblue wrote: »

Surely if I only want to borrow 50% of a house then that should be easier to get than wanting to borrow say 90%?

Where's the other 50% coming from? If you had the money all along you should have settled the DMP earlier.

Octaben

I assume he's talking about 50% purchase and 50% rent, hence the question is about shared ownership

kingstreet

The issue remains the loan to value.

The amount you wish to borrow versus the cost of the share you are purchasing still produces a loan to value.

So, what is the purchase price of your share, what deposit will you put down and is this a newbuild, or a resale?

Have you compared the mortgage cost, rent and service charges against the cost of an outright purchase as SO is not a cheap alternative and you have to satisfy both lender and Government affordability calculators.

amnblog

Boxblue wrote: »

I have been told that we could probably get a normal mortgage but with a higher deposit needed because of our history but wouldn't get a shared ownership mortgage because of our poor score.

Who told you this? A Broker?

kimbyanne

When we purchased our Shared Ownership house our broker said we needed to have a near perfect "credit history" as S/O lenders were stricter. No idea how true that was though as our credit history was good anyway.

amnblog

There is very little available in the SO market with poor credit unless you are a fan of eye bleeding rates.

Anzhelka

We have got shared ownership , but I think lenders who issue shared ownership mortgages are more picky. our credit history is excellent and no debts. our interest rate is 3.99% though. and we only had 5% deposit.