I want to buy out the housing association from my shared ownership scheme but I've got bad credit?

Posted on 24 July 2007

I purchased a property under a shared owership homebuyers scheme in 1999 with myself having 40%.  I now think i want to buy the other share from the housing association, as well as buy a property for a buy-to-let.  My main problem is I have adverse credit which is affecting my credit scoring.  I am working full-time for the NHS with a good salary.

Pls advise


Hello,

Whether or not the adverse credit stands in your way depends on how bad it is.  You need to take your credit report to a broker who can find the right lender for your personal circumstances.
 
If you go to www.experian.co.uk or www.equifax.co.uk you can get a copy of your credit report by either registering for a free month's trial, or by paying £2. This will show any missed or late payments on your record. 
 
I would sort out buying the current place first. As you have had the property for 8 years you probably have a good amount of equity, even at only 40% of the total growth. The mortgage broker will be able to tell you if there is even enough equity to take a bit of it away from the property to use as a deposit on a buy-to-let mortgage.  For a buy-to-let (BTL) you should have a 15% deposit, although some lenders can offer mortgages now with only a 10% deposit.  BTL is also not impossible with credit problems, although if you let a year pass with good credit conduct on your new mortgage you would be in a much better position in terms of credit score and the BTL mortgage you could get.
 
If you wish, we have a team here at Charcol that specialises in helping customers in financial difficulty, who can still access mainstream lenders if suitable for you and can fully assess your situation and find you a deal to suit you. Charcol provides mortgages from a panel of carefully selected lenders and now offers a fee-free service for adverse credit advice.
 
The typical APR for adverse credit mortgages is 7.9% APR.
 
Best of luck,

Katie

Category: Shared ownership

 

Answers provided in response to Ask Bea are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of Charcol Limited. All comments are made in good faith, and neither Charcol Limited nor Bea will accept liability for them.

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