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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.

For more information

Speak to our specialist advisers today.

01702 619 221

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:

  1. All information regarding the repossession itself.
  2. Your credit conduct since the repossession.
  3. 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.

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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.

Speak to your friendly mortgage advisor

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01702 619 221

Open: Monday - Friday 8:30am - 5:30pm

How Do I Know if I Have a Bad Credit Rating?

For some, they may have no real idea they have bad credit until they are declined a mortgage by a high street lender for the first time.

However, for others it may come as less of a surprise to learn that their credit history is far from perfect. You may be receiving letters from credit card companies, are aware of missed payments or are being visited by debt collectors.

The only way to know for sure what condition your credit history is in, is to secure a copy of your credit report.

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How to Access Your Credit Report

It is now easier than ever to obtain your own credit report and see for yourself how you might fare in getting a mortgage.

Once a mortgage application is submitted, the lender will access your credit file information to assess your suitability for a loan. So, if you’re concerned about having adverse or bad credit, we would encourage you to take action sooner rather than later, and obtain a copy of your credit report. This can be done for free, from a wide range of trusted online providers.

Need help getting your credit report? Contact us today and speak with a member of our friendly team for advice.

I Have a Bad Credit Rating – How Much Can I Borrow?

When looking at how much a person can borrow, the first thing many lenders will examine is your ability to afford the loan. This means they will need to look at your income – or income(s) if it’s a joint application – as well as your regular outgoings and other credit commitments.

In addition to looking at affordability, a lot of lenders will also consider your maximum income multiple. For example, 4x or 5x your income(s), depending on the lender.

With lenders now using such diverse methods to assess the extent to which you can afford a potential loan, the best way to prepare would be to discuss your situation with one of our professional advisors.

Having experience of working with bad credit lenders, we can guide you on your next steps to getting the mortgage you need.

Quick FAQs

Have a question about getting a mortgage after repossession?

Take a look at our extensive FAQ section for the answers to some of our most commonly asked questions, below.

Many borrowers assume that getting a mortgage after voluntary repossession can be difficult, if not impossible.

Whilst it can reduce the options available to you, there are specialist lenders out there who will be happy to consider your application and give you access to affordable mortgage deals.

Typically with any form of bad credit, the longer ago it happened, the less of an impact it’s going to have on your application. However, if your property was repossessed in the last twelve months then it is highly unlikely that your application will be approved at all and instead, you should focus on saving and rebuilding your credit history.

Someone with a clean credit history would expect to be able to borrow up to five times their annual income. However, after a serious credit incident such as a repossession, the amount a person is able to borrow will be lower. This amount is decided on a case by case basis, with lenders looking at affordability and the amount of time that has elapsed since the repossession.

Generally, between 12-36 months after your property has been repossessed you may be able to borrow up to three times your annual income. After three to six years this may increase to four times your annual income and after six years, this may rise again to five times your annual income.

How long ago the repossession occurred is going to be the biggest deciding factor for the rate of interest you’re offered. The greater the risk you pose to lenders, the higher the rates of interest will be. However, the more time that passes since the repossession, the lower the interest rates will become – especially if you’re keeping on top of your finances.

If you have previously had a property repossessed, then yes, you are more likely to be required to put down a larger deposit.

When applying for a mortgage one to three years after a repossession, expect to be asked for a minimum deposit of 30%. After three years, this may be reduced to 20%. After six years, things will have certainly improved for the better and you should be able to get a mortgage with a 10% deposit.

Yes, if you are asked by a lender then you have to declare it. Like bankruptcy, repossession is a serious credit event. So even after a record of repossession has dropped off your credit file, you may still be asked if you have ever had one and you will have to be honest.

Contact us today! Our friendly advisors will be happy to talk you through the next steps available to you and help you on your way to obtaining the mortgage you need.

We’re here to help you, not judge you, so call us on 01702 619 221.

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