Can I get a mortgage after repossession?
Getting a mortgage after repossession
The answer is yes, it is possible, but its more tricky. Expert advice is therefore vital in order to get you back onto the property ladder. Every lender has their own criteria around this. Some lenders will never be able to offer you a mortgage if you’ve had a repossession. Others will need the repossession to have been over so many years ago, and most lenders will also need to know if there was a shortfall (outstanding debt) as a result of repossession.
Being upfront and honest about the situation is vital. If you try and hide this from the lender it won’t get picked up until the solicitors’ searches towards the end of the house buying process. A repossession will stay on your credit file for 6 years from the date of registration but will always be found when the searches take place at the time of conveyancing.
Solicitors will also conduct a bankruptcy search at this stage. When combined with repossession this can complicate things even further, with only a handful of lenders willing to grant a mortgage.
What will lenders want to know about my repossession?
They will want to know the following
- Date of repossession
- Circumstances around the repossession
- Credit profile since the repossession
- Any debt outstanding form the repossession
- Were you made bankrupt at the same time
As with most of the bad credit mortgages, the longer ago the repossession was the better. The reason for the repossession is also going to play a big role in any new lender who looks at your application. Getting a mortgage after repossession involved being honest from the start.
How the information is presented to the lender is of paramount importance. Any evidence to back up your case will be needed and give you a better chance of success.
The lender with whom the property was repossessed will have a bearing on which lenders would be willing to look at any application. For example, Royal Bank of Scotland and NatWest are jointly owned, so if you’ve had a repossession with one its extremely unlikely the other would accept you.
If you have had any bad credit since the repossession this is also going to go against you. Lenders will be wanting to see that you have learnt any lessons from previous mistakes.
To check your latest credit report click here.
How much deposit will I need after a repossession?
This will ultimately come down to the date you were repossessed. However, if it’s been 3 years or less you will need at least 30-35% deposit. Once it has been over 3 years the criteria relaxes slightly and there will be options starting at 15% deposit. After 6 years you may be able (credit score dependent) to get a mortgage with as little as a 5% deposit.
This is an ever-changing market and speaking to one of our mortgage experts will give you the most up to date information. To find out how we can help call us on 0300 124 5655 or complete our quick enquiry form to speak to a mortgage expert.
How much can I borrow if I have been repossessed?
With a clean credit report, you may be able to borrow up to 5 x your income. As with any mortgage application you will be subjected to the same affordability checks as anyone else.
With an historic repossession the lender is going to want to ensure that you can meet the monthly repayments and are not in any current financial difficulty. To get a mortgage after repossession the lender will want to be sure it wont happen again.
What mortgage rates will I get if I have been repossessed?
If your repossession was over 6 years ago and the high street lender accepted this as part of their criteria, you would be offered the same rate as everyone else.
If you need to approach a specialist lender then it will be down to their rates at the time of application. Interest rate for bad credit mortgages are generally higher.
Outstanding debt from a repossession.
Some homeowners who have been repossessed may still have some debt owed to the mortgage company. This happens when the property is sold, and the proceeds don’t cover the full mortgage amount owed. This can influence your next mortgage application, and which lenders would consider you. Telling your mortgage experts all the facts at the outset is paramount.
Do I have to declare a repossession if its not on my credit report?
Yes. Some lenders don’t allow repossessions. However, if it’s not showing on your credit report you may pass the initial checks only to be declined further down the line. Your mortgage broker is unable to know if you’ve been repossessed if its not on your credit report. The solicitors will perform a check at a later stage. Always be upfront and honest with your broker and mortgage lender.
Speak to a repossession mortgage advisor.
There are many lenders available ranging from high street to specialist lenders. Most people go to their own bank, get declined or can’t borrow what they need. Just because one lender has declined you, don’t give up.
To get a mortgage after repossession our mortgage experts will get all the facts before deciding which lender is right for you. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.
The expert brokers we work with have experience in dealing with all aspects of repossession mortgages.Importantly using the whole of the market to access the very best deals available.