Shared ownership mortgage

Maritxu

Hi, I'm looking for some advice on my eligibility for a shared ownership mortgage.

I am 23, have one child and currently work for just over minimum wage, 32 hours a week. I never really had any hope of owning my own home until I discovered I am going to recieve some inheritance from my grandparents. It's likely that I'm going to recieve around 30,000. I have a pretty poor credit history, I have a default on a barclaycard from 2015 and a delinquent catalogue card account. I'm paying off my debts though, I have a DMP for the credit card and catalogue card and have about 5 settled accounts plus 2 current bank accounts, a phone contract and a credit card which I am using to build my rating.

My yearly income is 20,000 (this is including child benefit, tax credits and child maintenance payments). However, every online mortgage calculator seems to be telling me I can borrow very little.

I'd love to be able to look into shared ownership (using 30,000 for deposit) but I'm worried that my poor credit history and low income are going to prevent me from even owning 25% of a house! Just for reference I am in the south west and on average a 25% share of a 2 bed house in my area is around 55,000 although I can only find 40% shares at the moment which range from 70,000 to 90,000.

I'm definitely eligible from the point of view of the housing association but am I ever going to be able to get a mortgage?! Any help, advice and similar experiences would be greatly appreciated!

Maritxu

I'd love if anyone could share some insight?

DPDRC90

There is so much to consider here.

Personally, straight away I'd say not to bother given your credit history. Clear the debts and wait until your credit file is in a better position. Shared Ownership has the downside that your affordability will be impacted massively by rent for the % you don't own and service charges.

If you do receive the £30,000 inheritance; I would bank it, continue to save whilst waiting for your credit file to recover and reevaluate your position.

ALSO

The recent news about leaseholds, which the shared ownership properties you're considering most likely are leaseholds; you should be very cautious and follow this very closely.