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What is the process of getting a shared ownership mortgage with bad credit?



For those struggling to get on the property ladder, there are a number of government backed schemes available to help make it more affordable.

The Shared Ownership Scheme, sometimes referred to as ‘Part Buy, Part Rent’ or ‘Share to Buy’ is one of the ways that people who cannot afford to buy on the open market get the chance to purchase a share in a new build or resale property.

  • What is a Shared Ownership Mortgage?

Aimed at helping first time buyers or previous homeowners who are currently unable to buy, the Shared Ownership scheme works by giving first time buyers or those that do not currently own a home, the chance to purchase a share in a new build or resales property, whilst continuing to pay rent on the remaining percentage.

Initially a buyer would be able to purchase between 25-75% of the property which they have a mortgage for and make payments towards. Rent is then paid each month to the housing association who own the remaining shares. If for example, a buyer was to purchase 25% of their property, they will continue to pay rent on the remaining 75%, paying a combination of mortgage and rent each month.

The benefit of this is that the buyers require a smaller deposit and don’t need to borrow as much for the mortgage which can make a significant difference in being able to afford and be accepted for a mortgage.

The buyers can then purchase additional percentages of the property over time which is known as ‘staircasing’, with the goal being that the buyer is eventually able to buy 100% of the property and own their home outright.

  • Can I Get a Shared Ownership Mortgage If I Have Bad Credit?

As with all types of borrowing and mortgages, lenders are less likely to accept people with an adverse credit score or an unfavourable credit history. However, there are a number of specialist lenders who are able to consider applicants for a Bad Credit Shared Ownership Mortgage and offer some great deals that will help them take the next step to owning their own home.

  • What is The Process of Getting a Shared Ownership Mortgage With Bad Credit?


Although the eligibility for a Shared Ownership Mortgage can vary across the UK, here is a typical run down of who it might be suitable for;

  • Those with a combined income of less than £80,000 who live outside of London and £90,000 living inside London.
  • First time buyers or those who have previously owned and can no longer afford to.
  • People with an existing mortgage under the Shared Ownership Scheme.
  • Those planning to live in the property in its entirety and not rent out any part of it.
  • Are 18 years of age or above.
  • Have the permanent right to live in the UK.

Asses Your Finances

It’s always important to manage your expectations and get your ducks in a row as early on as possible, even if you are worried about what you might find. Checking your credit score and credit file allows you to have a thorough understanding of your financial position and see what you might need to do to give yourself the best chance of being accepted for a mortgage.

Find a Property

There are lots of online resources out there to help buyers find a suitable property that is available on the shared ownership scheme including online property portals and the government Help to Buy: Shared Ownership website.

Get Advice From a Mortgage Advisor

A reliable shared ownership broker or mortgage advisor will be able to help answer any questions you may have and guide you through the application process. They will also be able to help calculate how much of a deposit you will need, how much you can afford to buy and have the relationships already in place with specialist lenders to find the right deal for you.

One of the many appeals of the scheme is the low deposit that is required, although this can sometimes need to be increased slightly for those with bad credit in order to secure a deal, it is still substantially lower than with a normal mortgage.

The amount you decide to buy will depend on a number of things including your overall finances, the value of the property and how much you can afford. The larger the share, the larger the deposit and the larger the mortgage amount each month, so it is important to get the amount right.

Your broker will be able to recommend the right lenders for your individual circumstances, help you avoid paying more than you need to and get you the best deal with affordable interest and fair terms and conditions.

Apply, Accept, Complete

When applying for a Shared Ownership mortgage a valuation will need to be done on the property, and the lender will need to fully underwrite your case by assessing all information and documents that have been provided. Once the lender has satisfied their underwriting they will issue a Mortgage Offer which are typically valid for 3 months, but can be extended. Once all legalities are taken care of, you will be able to exchange and complete.

Enjoy Your Home!

Once you have completed then your property is yours to enjoy!

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Bad Credit

Martin Lewis issues guidance on using credit cards to build ratings – best deals | Personal Finance | Finance



Martin Lewis regularly urges savers to use caution when utilising debt themed products but at the same time, he acknowledges the need for a decent credit rating to get by financially. Today, the Money Saving Expert was questioned by viewer Miranda on how one can build their credit rating in difficult circumstances.

“What I’d then like you to do is go and do £50 a month of normal spending on it, things you’d buy anyway.

“[Then] Make sure you pay the card off in full every month, preferably by direct debit so you’re never missing it because the interest rate is hideous.

“That way you won’t pay any interest.

“You do that for a year, you’ll start to build that credit history, showing them you’re a good credit citizen.

“Then you’ll be able to move into the sort of more normal credit card range.

“So, bizarrely, to get credit you need credit. What credit will you get? Bad credit, go get the bad credit just make sure it doesn’t cost you.”

Consumers of all kinds may not have the best options at the moment as recent analysis from revealed.

In mid-November, they detailed that a number of high street banks have cut the perks and interest on a number of their current account deals.

On top of this, the Bank of Scotland and Lloyds Bank made credit interest cuts of up to 0.5 percent.

Rachel Springall, a Finance Expert at commented on the few options consumers and savers currently have available: “Clearly, it is vital consumers decide carefully if now is the time to switch, but if they wait too long, they may well miss out on a free cash switching perk.

“At present, providers will be assessing how they can sustain any lucrative offers in light of the pandemic.

“With this in mind, we could well see more changes in the months to come and if this does indeed occur, consumers would be wise to review whether their account is still worth keeping.”

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Should you use a balance transfer to pay off debt?



Should you use a balance transfer to pay off debt?
Image source: Getty Images.

A balance transfer might be the solution if you have debts and want to gain control over your finances. But whether a balance transfer is right for you will depend on a number of factors.

Things to consider before using a balance transfer

The size of your debt

If you want to apply for a balance transfer credit card, be aware that most providers will allow you to transfer up to 90% of your credit limit.

Your credit limit will be dependent on your own personal circumstances, including your salary, your credit history and your residential status (homeowner or renter).

Be realistic about your debt. For example, if you earn £25,000 per year and you have a debt of more than £15,000, a balance transfer might not be cheapest way to pay the debt.

The time taken to pay the debt

The main advantage of a balance transfer credit card is that many offer an interest-free period on the balance. So, if you can pay off your balance in that period, you won’t accrue any further interest charges.

However, these periods typically range from 18 to 24 months, so if you think you will need more time to pay the debt, you may need to factor in additional interest charges when the interest-free period ends.

Whether or not a balance transfer is the right debt payment solution will depend on your personal circumstances. Check our balance transfer calculator if you want to work out how much a balance transfer could save you in interest payments.

Your credit score

The advantage of a good credit score cannot be underestimated in this situation.

When applying for a balance transfer credit card, the company will check your credit score. Based on this score, they could refuse your application.

Even if you are accepted, if you have a bad credit score they could reduce your credit limit. Ultimately, this will determine the benefit of a balance transfer as a suitable debt payment solution.

If you think your credit score might be a problem, it’s worth checking with the credit reference agencies before applying. That way you can avoid any nasty surprises.

There are three main consumer credit reference agencies in the UK. They are Equifax, Experian and TransUnion (Noodle).

Alternative solutions to balance transfers

You could still use a balance transfer even if the size of your debt is bigger than the credit limit.

Transferring part of the debt would enable you to benefit from any interest-free period, where applicable.

Alternatively, if you have multiple debts, you could consolidate all of your debts so that you can make a single regular payment. If necessary, you could do this using an unsecured personal loan over a period longer than 24 months.

Take home

Look at your own personal circumstances with a critical eye. Remember that you need to factor in living expenses when thinking about how long it will take you to pay off your debt.

Balance transfers are a useful method for debt repayment, but be aware that credit cards are an expensive way to borrow money. Take full advantage of any 0% deals wherever possible. Check out our list of the best 0% credit cards.

Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

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Turn credit declines into a win-win | 2020-11-20



The pandemic has left millions of people needing credit at a time when lending standards are tightening. The result is a lose-lose situation—the consumer gets a bad credit decline experience and the credit union misses out on a lending opportunity. How can this be turned into a win-win?

The case for coaching

Let’s start by deconstructing the credit decline process: The consumer is first encouraged to apply. The application process can be invasive, requiring significant time commitment and thoughtful inputs from the applicant.

After all that, many consumers are declined with a form letter with little to no advice on actions the applicant can take to improve their credit strength. It is no wonder that credit declines receive a poor Net Promoter Score (NPS) of 50 or often much worse.

On the flip side, forward-looking credit unions provide post-decline credit advice. This is a compelling opportunity for several reasons:

  • Improved customer satisfaction. One financial institution learned that simply offering personalized coaching, regardless of whether or not consumers used it, increased their customer satisfaction by double digits.
  • Future lending opportunities. Post-decline financial coaching can position members for borrowing needs even beyond the product for which they were initially declined.
  • Increased trust. Quality financial advice helps build trust. A J.D. Power study noted that, of the 58% of customers who desire advice from financial institutions, only 12% receive it. When consumers do receive helpful advice, more than 90% report a high level of trust in their financial institution.

Provide cost-effective, high-quality advice

AI-powered virtual coaching tools can help credit unions turn declines into opportunities. Such coaches can deliver step-by-step guidance and personalized advice experiences. The added benefit is easy and consistent compliance, enabled by automation.

AI-based solutions are even more powerful when they follow coaching best practices:

  • Bite-sized simplicity. Advice is most effective when it is reinforced with small action steps to gradually nurture members without overwhelming them. This approach helps the member build momentum and confidence.
  • Plain language. Deliver advice in friendly, jargon-free language.
  • Behavioral nudges. Best-practice nudges help customers make progress on their action plan. These nudges emulate a human coach, providing motivational reminders and celebrating progress.
  • Gamification. A digital coach can infuse fun into the financial wellness journey with challenges and rewards like contests, badges, and gifts.

Virtual financial coaching, starting with reversing credit declines, represents a huge market opportunity for credit unions. To help credit unions tap into that opportunity, eGain, an award-winning AI and digital engagement pioneer, and GreenPath, a leading financial wellness nonprofit, have partnered to create the industry’s first virtual financial coach. To learn more, visit

EVAN SIEGEL is vice president of financial services AI at eGain.

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