Shaun I’Anson is head of sales at Preferred Mortgages
“Preferred’s shared ownership products are designed to enable those eligible for the various government schemes to take a step on to the property ladder.
We do not work on income multiples, but look at affordability, based on existing commitments and the monthly repayments. We look to maintain these within 53 per cent of monthly income. We ignore defaults and, with Warren’s income and a small monthly repayment to his student loan, he would appear to fit our near-prime shared ownership product. The 35 per cent share he is looking to purchase would also place him within our 25-75 per cent loan range.
By initially purchasing a share of a property, as circumstances change, the opportunity arises to increase the share and eventually purchase the property outright.”
Jonathan Barnett is from All Mortgage Matters Ltd
“Warren’s credit history would be unacceptable to the majority of providers offering a shared ownership mortgage despite his default being relatively small.
With no deposit, I’d recommend Preferred ,which ignores defaults and does not charge for higher lending. It will lend on shareholdings ranging from 25-75 per cent. Fixed rates at 7.74 per cent are available for two or three years, but the £795 application fee cannot be added to the loan.
With a 5 per cent deposit available on the purchased share, Abbey or Nationwide would be among my choices. Abbey is not too concerned by defaults below £3,000 and has a flexible underwriting approach, whereas Nationwide does not charge high lending fees.
The level of borrowings is dependant upon affordability calculations.”
Andrew Frankish is managing director of Mortgage Talk
“The combination of an adverse credit history together with shared ownership will usually cause an issue with the majority of lenders. As such, the level of the default will determine whether or not the client is able to obtain a mortgage with a lender. The issue of the amount of the available deposit will also be a key determining factor.
If it is a minimal default, Leeds BS may consider the case, as would the Woolwich. This is, however, entirely dependent on the outcome of their credit profiling investigations.
If there is a large deposit available, which we have to assume there isn’t, other lenders may look at the case. All things considered however, the size of the default is the major factor.
