Mortgages After Home Repossession

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Can I obtain a mortgage following a repossession?

The answer is YES.

It is totally feasible to obtain a mortgage following a repossession. Nevertheless, not every lender will welcome applicants with open arms. One of the most serious types of poor credit is repossession, particularly when applying for a mortgage. This is due to the fact that you previously let a mortgage go into default. It’s crucial to realise that getting a mortgage approved won’t be simple.

There are lenders who specialise in mortgages for those with poor credit and have packages developed just for this purpose. Prior to making a loan, specialised lenders will still do an evaluation. Obtaining a mortgage after a repossession may be feasible, depending on your circumstances.

When was your property repossessed?

Lenders will pay special attention to the length of time that has passed after the repossession of your home.

Less than 1 year: Unless your financial status significantly changes, such as through an unanticipated bequest that enables you to make a sizable down payment, your prospects are almost zero. Even then, you will have to submit an application to a specialised lender and almost certainly pay a hefty interest rate.

1-2 years ago: There are specialised lenders who will accept applications if you fulfil all other financing requirements. Your options for lenders will still be quite restricted, and you’ll probably require a 30% deposit.

2 – 6 years ago: You will require a comparable down payment, but because more lenders may be willing to consider your application, the interest rate you receive may be a little more attractive.

Over 6 years ago: There are suppliers who will handle your application similarly to every other once this period of time has gone. As a result, you might obtain a mortgage with more typical interest rates and a larger selection of deposit possibilities.

Your credit report will reflect the repossession for six years. Your credit score may rise once it starts to fall. However, most lenders include a question on their application asking if you’ve ever had a home repossessed, so you might still need to disclose it.

How do lenders evaluate candidates who have had their homes repossessed?

Following a repossession, lenders often evaluate mortgages based on the following:

  • Information on the repossessed property, including the date and value
  • Your financial and credit history following the repossession
  • Your financial situation at the moment

Before applying for a mortgage, it is important to do your homework and get yourself ready, and this is especially true if you’ve ever had a home repossessed in the past. The decision of whether or not to lend money to you will ultimately be made by the lenders. Because of this, it is essential to have an understanding of how a lender will evaluate you once they have taken possession of your property.

What circumstances led to the repossession of your home?

Many conventional lenders would reject any application from customers who have already experienced repossession. However, there are many specialised lenders that are willing to talk about the circumstances that led to it and show flexibility.

Uncontrollable circumstances like illness or unemployment will be seen favourably as comparison to a repossession brought on by merely overextending oneself financially. Regardless of the cause of the repossession, you must show that your financial situation has improved.

Lenders frequently need supporting documentation for your application to aid in their evaluation. Your application’s chances of being approved for a mortgage can be improved by having one of our specialised advisor present it. Expert mortgage guidance is crucial since we are aware of the best lenders to work with and how to present your application.

Because several lenders are affiliated with the same banking group, getting turned down by one will certainly result in rejection from the others in the group. To this end, having the assistance of one of our professional advisers can greatly increase the likelihood of your mortgage application being accepted.

How have you managed your credit following the repossession?

It’s crucial to persuade the lender that your financial issues were a temporary setback and that you can now make payments when you apply for a mortgage following a repossession.

The vast majority of providers are going to assume that there were additional financial concerns at the time of the repossession. After all, your residence was likely the very last object to be lost.

Lenders will thus be seeking to establish that you have engaged into payment plans with creditors and kept your pledges, even though other negative credit is common. This might be done directly with creditors, through a debt management firm, or through an IVA.

If you’ve since obtained more credit it must have been responsibly managed.

Your current account balance should ideally be in the positive. Regularly using an authorised overdraft won’t necessarily preclude you from acquiring a mortgage, but doing so will raise a red signal for lenders.

Payday loans are a bad idea since they show that you don’t have good control over your finances. Since lenders must lend responsibly under the law, lending tens (or hundreds) of thousands of pounds to someone who is having a hard time making ends meet may be seen as risky.