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Mortgage After Repossession
Finding a Mortgage After Repossession – What You Need To Know
Mortgages After Repossession
If you’ve previously found yourself in the unhappy situation of having had a property repossessed, then we understand the worries and questions you may have running through your mind. You may think that your chances of home-ownership are over. But just because you fell into difficulties before, it does not mean that your property ownership journey must come to an end.
At Amber Mortgage Solutions our expert bad credit advisors know how to help our clients secure an affordable mortgage following repossession. With many years’ experience working with specialist bad credit lenders, we know where to find the best mortgage to suit your unique circumstances, regardless of your credit history.
Can I Get a Mortgage After House Repossession?
With many specialist lenders happy to consider applicants with a variety of past credit issues, it is possible to get an affordable mortgage after a repossession.
When deciding whether or not to offer a repossession mortgage, specialist lenders will examine the following three things:
- All information regarding the repossession itself.
- Your credit conduct since the repossession.
- Your current financial situation.
Read on for more information on these three key areas.
Here’s what our client’s have to say!
All Information Surrounding The Repossession
When making a decision, any potential lender will want to know all of the key information surrounding the repossession.
When did it happen?
As is the case with the majority of bad credit events, generally, the older it is the less of an issue it will be. If you had a property repossessed in the past year, then there is practically no chance of any lender offering you a mortgage. Your best chance would be to hold off on applying for a longer period of time and instead, work on saving money for a deposit and rebuilding your credit score.
However, if the repossession took place over twelve months ago, then whilst it may still be difficult it is not impossible.
The age of the repossession is also of importance because it will affect the loan to value (LTV) ratio offered to you. This means the percentage of the market value of the property that the lender will be prepared to offer you. The rest you will have to be able to put down yourself as a deposit. If your repossession took place between 12-36 months ago, be prepared to put down at least a 30% deposit. If the repossession took place over three years ago, then things start to improve and you can expect to put down a 20% deposit. Once a repossession happened six or more years ago, a 10% deposit should be sufficient.
Why did it happen?
The reason behind why your property was repossessed, if able to back with evidence, may play an important factor in a lender’s decision. For example, if you fell victim to something outside of your control, such as fraud, then lenders may be more sympathetic.
How much money was involved?
Whilst the answer to this question may not have the biggest impact on a lender’s decision as how old the repossession is, it will still be taken into consideration.
It is all perceived risk. If the repossession involved just the one property on which you had a mortgage for a reasonably low sum, then lenders are going to view your application more positively than if you had several properties with a higher sum of money or percentage of the loan involved.
Who was the lender?
This is important because the majority of high street lenders are members of banking groups owned by the same parent company. So whilst lenders have different names, if you had a property repossessed by one, then chances are that the other lenders belonging to the same group would automatically turn you down.
With access to the whole market, here at Amber Mortgage Solutions we understand which lenders to avoid and which to approach, saving you time and the stress of having to be declined by multiple lenders.
Is there any money still outstanding?
If you are still paying off debt to the lender who repossessed your property, then this will most certainly impact the amount of money you will have to repay on any new loan. When considering any mortgage application, lenders look at your ability to repay any finances that you borrow, this is part of your affordability assessment. So if you do still have outstanding debts, this will not only affect the chances of you being offered a mortgage but also the size of the deposit you are asked to provide.
Are there any other bad credit issues on your report?
When someone has had their property repossessed, they may also have other bad credit events on their report. This is understandable, as during times of financial difficulties people will prioritise their mortgage, withholding other payments to keep up their mortgage repayments. This can create further bad credit issues such as CCJs, IVAs or debt management plans. Lenders will also want to know if you were declared bankrupt. Be honest as this can all be checked on your credit file.
If you do have any credit issues such as these, then you can always speak with a bad credit mortgage broker for professional advice.
Our experienced brokers will help you to present all of this information in such a way that it will help, rather than hinder, your application.
Your Credit Conduct Since The Repossession
Another area lenders will look at, is your credit conduct since the repossession. They will want to see that there have been no adverse credit issues such as CCJs or defaults since the repossession and that you have stayed on top of your finances.
How you have conducted your affairs since the repossession is important as lenders will be more willing to approve an applicant who, despite having troubles in the past, has since clearly got a firm grip of their finances and will not be a risk to lend to.
Your Current Financial Situation
Two key elements of your financial situation will be looked at when trying to find you a mortgage after repossession. The first being how long ago your financial problems took place and secondly, how healthy your credit record has been since.
Generally, if you’ve kept a good credit report, have few financial commitments and the repossession was more than four years ago then you are more likely to benefit from a higher LTV ratio and be asked to put down a deposit of as little as 10%. Whereas applicants with recent bad credit and heavy financial commitments may find securing the mortgage deal of their choice more tricky.
Finding Specialist Mortgage Lenders After Repossession
Here at Amber Mortgage Solutions our experienced team of brokers take great pride in helping our clients to secure a competitive mortgage after repossession.
If you’ve been declined by high street lenders due to a less than perfect credit history, we can access specialist lenders willing to offer you exclusive rates and the best mortgage deals to help you on your way to buying a house after repossession.
So what are you waiting for? For personalised advice and help with your mortgage application, contact us today.