This has ptobably benn asked many times before but i was wondering if any lenders are offering shared ownership mortgages with bad credit? We have our house on the market but heres why we are after a SO property (which we have been offered by the HA).

My husband and i have a lot of debt. We are now finally on top of things. Dh is in a dmp with cccs and has 3 defaults (1 of which is satisfied but only 2 weeks ago) and has never missed a payment on his dmp. Ihave 1 credit card which i pay for each month without fail (although until 4 months ago i had 3 cards and paid late). We also have a secured loan which we have never missed a payment on. We realise now how stupid we have been but times were hard then. Hindsight is a wonderful thing.

Anyway, basically with the proceeds from our house sale (if we ever sell!) we are paying off all debt. This means with the money left over, we havent got enough of a deposit to buy off the open market but have enough to purchase a SO property. The HA have looked at our application and have said that as soon as we secure a mortgage and sell our house there is a house waiting for us.

I was wondering if you can tell me any lenders who would possibly lend to us? I apologise for the long post! I have also posted this on the mortgage board.

Monica

Dear Monica,

My wife and i seem to have a very similar situation to you. We have been accepted for a new build 3 bed house with a housing association and have our own property to sell which we have found a buyer for and should go through in the next month or so. We need a mortgage for our share of the shared pwnership property and after we have started the process a couple of weeks ago we are finding our credit files to be hindering us. I have previously satisfied CCJ's and defaults and a new default dated 2 months ago we have settled this month. It appears that because there is anything negative on the credit file no one will take us on for a mortgage. We know items sit on your file for 6 years and it appears to make no difference whether things are settled or not; the word default shows so puts creditors off.

I have a couple of friends who work as mortgage advisors for estate agents and they have said not to panic as part of it is the current credit crunch and housing market. We were advised that this time last year there were around 69,000 different mortgage products available and today there are around 17,000, of which none will offer 100% value, 4 will offer 95%, and evidently very few will touch shared ownership. We didn't have any idea when applying for shared ownership it would be so hard to get a mortgage, apparently the reason lenders don't want to is because they give you money to buy a portion of a property the landlord of which can ask you to leave of you break the tenancy aggreement making it very difficult to recover their money (i.e. a usual reposession). So much for affordable housing schemes - thanks Gordon Brown!!!

As you state hindsight is a wonderful thing, we should have nipped the default in the bud. My wife doesn't work as she left when our daughter was born two years ago and she is due to give birth again in 5 weeks time. The default was due to missed payments and we weren't aware it had gone to default until we applied for a copy of our credit file as advised by the mortgage advisor. We are hoping there will be a company somewhere who accepts this situation and are keeping our heads high! Please come back to us if you progress any further as will we.

Good luck

Barrie

Hi Barrie,

I'm not sure if you got your mortgage sorted in the end but I'm currently looking to buy a 3 bed new build shared ownership property with the HO. Its the very eary stages and we have a property to sell.

Do you have any advice? Was as easy as they said. We bought our first property with their help and it was not easy, in fact I nearly said goodbye to the whole thing but continued. We have debt that we are paying off each month and have cleared some of the accounts but I still have a bad credit file with at least 6 defaults registered in the last 2 years and it sucks as we can't approach mainstream lenders but our last mortgage was through a broker and they got us an amazing deal which the HO agreed to. Would they do this again?

Any advice would be great

Thanks

Gemma

hi first off in regards to how many mortgage products, thats on the open market, lenders can afford to be picky with so as there is no competition

chesire is the only sub prime lender, but be warned as due to thier high intrest rates, some ha will not accept them as hey do not see an apr over 7% as affordable, check with your ha if they only accept a certain intrest rate, then check with chesire building society

good luck any more info let me know as i am currently completing my so property.