Do Lenders Require a Bigger Deposit If You Have Bad Credit?

No. Unlike standard mortgages, some specialist lenders will lend up to 100% of your share on shared ownership — even with bad credit.

• You may not need a deposit from the lender’s perspective.
• The deciding factor is often the housing association, not the lender.

Housing Association Deposit Rules

Even if a lender allows 100% of your share, the HA selling the property may still require a deposit:

• Common requirement: 5% of the share you’re buying.
• Some are more flexible and allow 0% if the lender approves.
• Rules vary by association — always confirm upfront.

Why Do HAs Ask for Deposits?

• Shows buyer commitment and financial resilience.
• Adds a cushion if values change.
• Reduces risk when budgets are tight.

Does Having a Deposit Help Your Case?

• Strengthens your application and widens lender choice.
• Signals stability to both lender and HA.
• Covers fees (legal, valuation, moving).

Real Example – No Deposit Shared Ownership

“I thought bad credit meant saving thousands. My lender allowed 100% of my share and the HA only wanted 5% — I moved far sooner than expected.”
— Client review

Practical Tips Around Deposits & Bad Credit

• Check both lender and housing association rules — they can differ.
• Keep some savings ready even if 0% is possible (fees still apply).
• Ask your broker early to confirm whether HA needs 5%.
• Don’t assume you need a huge deposit — many buyers delay unnecessarily.

Why Deposit Rules Matter with Bad Credit

With shared ownership, the lender and HA can set different rules. Bad-credit-friendly lenders may still finance up to 100% of your share, but the HA might prefer at least 5%. Knowing this early helps you plan — and even a small deposit strengthens your case.

Further Reading on Shared Ownership with Bad Credit

Further Reading – Government Schemes

Step 1: Check Your Credit File

Pull reports from Experian, Equifax and TransUnion. Confirm accuracy and understand what’s showing (defaults, CCJs, missed payments).

Step 2: Deal with Outstanding Issues

• Clear small arrears where possible.
• Mark defaults/CCJs as satisfied — it’s viewed more positively.
• Even partial settlements can help demonstrate intent.

Step 3: Avoid New Credit Applications

Too many recent searches signal ongoing reliance on borrowing. Pause new credit in the months before applying.

Step 4: Save a Deposit

Some specialist lenders can fund up to 100% of your share. However, many housing associations still ask for a minimum 5% deposit and savings strengthen your case.

Step 5: Show Stability & Affordability

• Stable income and employment history.
• On-time rent and utility payments.
• Sensible, steady outgoings and evidence you can afford mortgage + rent + charges.

Step 6: Work with a Specialist Broker

• Many flexible lenders are broker-only.
• We match your profile to receptive lenders and package the case properly.
• We liaise with the housing association on eligibility and deposit rules.

“We thought our bad credit meant no chance. Honest Mortgages guided us to a specialist lender — we’re now in our first home.”
— Client review

Why Preparation Matters for Approval

Lenders want evidence your situation has improved. Clean recent conduct, complete paperwork, and proof of affordability can outweigh older issues — and speed up the process.

• Consistency: 12 months of clean banking carries weight.
• Paperwork ready: ID, payslips, statements, deposit proofs.
• Positive patterns: regular rent payments show reliability.

Further Reading on Shared Ownership with Bad Credit

Further Reading – Government Schemes

High Street vs Specialist Lenders

High street lenders tend to require a clean file and pass/fail automated checks. Defaults, CCJs, recent missed payments, IVAs or bankruptcy are usually declined.

Specialist lenders & building societies look beyond the score: when issues happened, whether they’re satisfied, bank conduct, and full affordability (mortgage + rent + service charges).

What Do Specialist Lenders Look For?

• Age & severity of credit issues — older/smaller issues carry less weight.
• Settlement status — satisfied defaults/CCJs are viewed more positively.
• Recent conduct — last 6–12 months with no new blips helps a lot.
• Deposit & HA rules — some lenders can go to 100% of your share, but many housing associations still want 5% of the share.
• Affordability — steady income and sensible outgoings, factoring rent and service charges.

“We’d been turned away by three banks. Honest Mortgages found a specialist lender who said yes in days.”
— Client review

Why Shared Ownership Can Work with Bad Credit

• You’re borrowing against a share, so the loan is smaller.
• Risk is reduced compared with lending on the full value.
• Housing associations provide an extra layer of structure/security.

How to Access These Lenders

Most are not direct-to-consumer. A broker can:

• Identify which lenders are currently accepting your exact profile.
• Match deposit/Housing Association rules to criteria.
• Package the case to pre-empt queries and avoid credit-score damage from scatter-gun applications.

Further Reading on Shared Ownership with Bad Credit

Further Reading – Government Schemes

What Is an IVA and How Does It Affect Your Credit?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement to repay debts over time. It stays on your credit file for six years from the start date. While it’s active, lenders won’t consider applications; after it ends, most still want to see a solid period of stability before lending.

Can You Get Shared Ownership During an IVA?

No. Applications aren’t accepted while your IVA is active. It must be fully completed/settled first.

How Long After an IVA Do Lenders Consider You?

• Under 3 years since settlement: unlikely — most lenders will ask you to wait.
• 3+ years since settlement: a handful of specialist lenders may consider you, especially with clean recent conduct and strong affordability.

Do You Need a Deposit After an IVA?

Some specialist lenders that accept past IVAs can lend up to 100% of your share, so no deposit may be needed with the lender. However, many housing associations still ask for a minimum 5% deposit of the share. Savings always strengthen your case and help with fees.

How to Improve Your Chances After an IVA

• Ensure at least 3 years have passed since the IVA was settled.
• Check your credit files show the IVA as satisfied/settled.
• Build clean conduct: no missed payments, stable income.
• Save a small deposit (many HAs ask for 5%).
• Use a specialist broker — only a few lenders consider post-IVA cases.

“I’d had an IVA and assumed I’d never be approved. Honest Mortgages explained the timeline and helped me plan — I’m now in my first home.”
— Client review

Further Reading on Shared Ownership with Bad Credit

What is a CCJ and How Long Does it Stay on File?

A County Court Judgment (CCJ) is a court ruling that you owe money to a creditor. It stays on your credit file for six years from the date issued. Paying it doesn’t remove it, but it can be marked “satisfied,” which most lenders view more positively.

Settled vs Unsettled CCJs – What’s the Difference?

Unsettled CCJs are usually a hard stop with most lenders. Settled CCJs — especially those settled 12+ months ago — can be acceptable to certain specialist lenders alongside strong affordability.

How the Age of a CCJ Affects Your Chances

• < 12 months old: Very difficult — most lenders decline.
• 12–24 months old: Possible with specialist lenders if settled and your conduct is clean.
• 3+ years old: Much easier, particularly with no new issues since.

“I had a CCJ two years ago and thought no one would help. Honest Mortgages found a shared ownership lender who said yes.”
— Client review

Do I Need a Deposit If I’ve Had a CCJ?

Some specialist lenders can lend up to 100% of your share, so a deposit isn’t always required by the lender. However, many housing associations still ask for a minimum 5% deposit of the share. Having savings also helps with fees.

Practical Steps if You’ve Had a CCJ

• Check your report — confirm dates and status are correct.
• Settle CCJs where possible — “satisfied” looks far better.
• Show stability — clean conduct for 6–12 months, steady income.
• Save a small deposit — many HAs ask for 5% of the share.
• Use a broker — most bad-credit friendly options are broker-only.

Further Reading on Shared Ownership with Bad Credit

Further Reading – Government Schemes

What is a Default and How Long Does it Stay on File?

A default is recorded when payments have been missed over time (often 3–6 months) and the account is closed. The default is then added to your credit file.

It remains on your report for six years from the default date — even if you later pay it off. That can limit options with mainstream banks, but specialists assess context.

Recent vs Older Defaults – What’s the Difference?

• Within the last 12 months: hardest category; most lenders view as current difficulty.
• 12–24 months old: some specialists may consider if you’ve been stable since.
• 3+ years old: often carry less weight, especially with clean recent conduct.

Why Shared Ownership Can Be More Flexible

Shared ownership is designed to help buyers with smaller deposits and loan sizes — that can make specialist lenders more open to past issues.

• Some building societies and specialists will actively consider defaults.
• Strong current affordability and clean recent conduct weigh heavily.
• Buying a share reduces the loan amount (and lender risk).

“I thought defaults meant I’d never get a mortgage. Honest Mortgages got me approved for a shared ownership home and guided me through the steps.”
— Client review

Do I Need a Deposit If I Have Defaults?

Some specialist lenders that accept defaults can lend up to 100% of your share, so a deposit isn’t always required by the lender.

However, many housing associations still require a minimum 5% deposit of the share. Having savings also helps cover fees (solicitor, valuation, moving).

Shared Ownership Mortgages After a CCJ

Practical Steps if You Have Defaults

• Check your credit file and correct any errors.
• Settle outstanding defaults where possible — “satisfied” looks stronger.
• Avoid new credit applications before you apply for a mortgage.
• Save a small deposit if you can — many HAs ask for 5% of the share.
• Work with a broker — many flexible lenders are broker-only.

Further Reading on Shared Ownership

Further Reading – Government Schemes