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Can I get a mortgage after I’ve had a home repossessed?

At Simply Adverse one of the most common questions we get asked is “If my house is repossessed can I get another mortgage?”  

Like any adverse credit, getting a mortgage after repossession is less straightforward than for someone with an unblemished credit history. But it’s not impossible. There are a number of things that affect your chances of getting a mortgage after repossession. Taken together these will influence whether a not a lender is willing to give you a mortgage after repossession.

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How Long Ago Was Your Property Repossessed?

The most significant factor that lenders consider is the date of your home repossession. The more time that has passed, the more likely it is that a lender will consider you. If your home was repossessed during the last 3 years it will make it very difficult to get a mortgage, and you’ll need to wait at least 12 months from any repossession to even consider making an application.   

However, as the table below demonstrates. If you are able to raise a significant deposit, your chances of being accepted for a mortgage is improved.

Time since repossession Deposit required Likelihood of finding a mortgage
Less than 12 months n/a Almost zero
1-2 years Around 30-35% Very difficult
2-3 years Around 30-35% Difficult
3-4 years Around 15-20% Possible
4-5 years Around 10% Possible
5-6 years Up to 10% Possible
More than 6 years 5% Possible

Note: the details on this table are indicative only as criteria regularly change and lenders’ decisions will depend on your individual circumstances.

How Much Was Your Repossession Debt?

As well as how long ago your repossession took place, lenders will be interested in how much your repossession debt was. If your repossession was for millions of pounds or for multiple properties it will be more difficult for you to obtain a mortgage than if your repossession debt was for a smaller amount on a single property.

That’s not to say that someone with a larger repossession debt won’t be able to get a mortgage, just that you’ll need to ensure that your mortgage broker approaches the most appropriate lender.

Getting a Mortgage After Repossession

Why Was Your Home Repossessed?

While the bottom line is that the reason for repossession will have been your failure to keep up mortgage repayments, some lenders will look at the reasons behind this in more depth. You may have been the victim of fraud or there may have been other circumstances that were out of your control for example.

Our mortgage brokers know which lenders may exercise flexibility with your application if you are able to evidence a legitimate reason for your repossession. We understand how to present the facts around your repossession in the right way to maximise the likelihood of receiving a favourable decision.

Who Was Your Home Repossessed By?

Many lenders are part of larger banking groups, for example the Lloyds banking group includes not only Lloyds, but also Bank of Scotland, Birmingham Midshires and Halifax. If you apply for a mortgage with a lender in the same group as the lender who repossessed your home, then you are likely to have your application declined.

Getting a Mortgage After Repossession

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Do You Still Owe Your Previous Lender Money?

When you home is repossessed, the lender will generally use an asset management company to sell the property in order to recover the cost of your mortgage. In some cases, the sale price of the property won’t cover the amount that you owed. In these cases, you will be required to make an arrangement with the lender to repay the balance. These so-called legacy payments may limit the number of lenders who will consider your application.

How Healthy Is The Rest Of Your Credit File?

As with any mortgage application prospective lenders will carry out credit checks prior to making any decision. Any repossession will of course appear on your credit file, but lenders will also want to ensure that there are no other credit issues.

If you do have your home repossessed it is more important than ever that you manage the rest of your financial commitments responsibly. Make sure that you keep on top of other credit commitments and try to keep your bank balance in the black. You should also avoid applying for payday loans, as these tend to be viewed unfavourably by mortgage lenders.

Getting a Mortgage After Repossession

Requesting your credit report will give you an idea of how healthy your credit history, and to understand your credit report in more detail, read our guide.

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If you’ve had a property or properties repossessed it can feel as though you may never be able to own your own home again. The important thing to remember is that with the right advice and guidance it is possible to find a lender who will consider your application.

This is where the professional bad credit mortgage brokers at Simply Adverse come in. Our experience and knowledge us give us the skills to match your circumstances with the lender who is most likely to take a sympathetic view of your circumstances.

If you’ve had your home repossessed but now want to think about getting another mortgage, speak to Simply Adverse today. We’ll give you honest unbiased advice, and support you throughout the application process.

Your home may be repossessed if you do not keep up repayments on your mortgage.