How Finbud mortgage Brokers Can Help You
Have you ever had your property repossessed? You may believe your dreams of home-ownership ended there and then. But, that’s where your wrong.
The simple fact that you fell into financial difficulty before does not need to permanently prevent from owning a house in the future.
What will impact a lenders decision?
A good deal of people were victims of the credit crunch, but a lot of them have recovered from this and therefore are in a place to put down a deposit on a house again. There are a few lenders who will consider individuals who have had financial issues in the past. Therefore, making it possible to get a competitive deal on a repossession mortgage.
When submitting a mortgage application for a repossession mortgage, lenders tend to look at 3 main areas:
- 1. What are the details of the repossession itself;
- 2. How you have conducted your financial affairs since then
- 3. Your current financial status.
Details of the repossession
When it comes to the repossession in question, then a lender will want to understand the following:
- When did the repossession happen?
- why did it happen?
- just how much money was demanded by the lender?
- Who was the lender at the time?
- Is any money still outstanding?
- Do you have any other bad credit issues on your credit report?
When did the repossession happen?
Like many negative credit incidents, in general the longer it had been the better. If the repossession happened within the previous 1-2 months, your likelihood of being given a mortgage are basically non-existent. You would be better off waiting a while before applying for a mortgage and focus on rebuilding your credit history as well as saving for a larger deposit. If it occurred more than one year ago, then obtaining a mortgage will be a challenge but it is not hopeless.
Nevertheless, age of this repossession will impact the loan-to- value (LTV) ratio. The proportion of the market value of the house that you wish to buy and that the lender is ready to offer you in a form of a mortgage. The remainder will need to be paid as a deposit. Between 12 months and 36 weeks following the repossession, you will need to place a significant deposit; as a rough guide a minimum of 30 percent. If the repossession took place more than three years ago, then things begin to look far better and you may be able to borrow up to 80% of the property value. Once six years past a repossession you could as high as 90% of the property value.
Why did the Repossession happen?
The reason why your house was repossessed is a significant factor. For instance, if you have been a victim of fraud or have been affected by another reason that was totally outside your control, then you’re inclined to be treated more sympathetically . However you will require proof to back your claim up. Our specialists know the best method to present such information so it helps you rather than hinder your application.
Just how much money was demanded by the lender?
Although “how much” is less of a significant factor then how long ago it will still have an impact. For instance, if the repossession linked to your only property which you had a mortgage and it had been for a comparatively small sum or percentage of the initial loan, then you’re inclined to be seen more favourably than if the amount involved was enormous, or a large proportion of the initial loan, or if multiple properties were involved. It is all about risk: the lower the value and the fewer the mortgages linked to the repossession the better.
Who was the lender at the time?
The main reason why the lender needs to be taken into account is because many lenders are part of banking groups owned by the same parent company. For instance , Lloyds banking group includes, Bank of Scotland, Birmingham Midshires and Halifax. That usually means that while every lender has a different name, you’re effectively applying to the exact same business. Additionally, it suggests that if you had a property repossessed by a single member of this group, the odds are that you’d be turned down for a mortgage from all them. At Finbud we know the connections between creditors/lenders, thus we will be able to assist you avoid making time-wasting decision’s that could further impact your credit report as a result of the amount of checks done that will show up on your credit file and may even lower your credit score.
Is any money still outstanding?
Should you still owe an money to the lender that repossessed your house, then it’s very likely to impact not just your own chances of being given a brand new mortgage , but in addition the amount you wish to borrow.
If you’re still paying the debt off, then that may impact the sum of money you have to repay any new mortgage. To evaluate mortgage affordability – in other words, the ability to repay the mortgage –lenders look at both the income and your outgoings. The outcome regarding how much they are willing to lend you is based on this affordability assessment.
Do you have any other bad credit issues on your credit report?
When people have financial issues they typically do whatever is essential to keep above water. That is perfectly clear, but it also may indicate that additional payments have been withheld to be able to continue paying off the mortgage for as long as you can. This may lead to you very likely having negative credit events in your credit report on top of your house being repossessed as well.
These may consist of a default notice, County Court Judgments (CCJs), missed payments , an individual voluntary arrangement (IVA) or even a debt management program (DMP). People who have a poor credit history are considered by lenders to be a greater risk, and therefore not able to borrow as much as those who have a clean credit file. The age of this event is significant. The further back the event took place the less effect it’s going to have, and when it happened over six years back it’ will no longer show on your credit report.
In the event that you were declared bankrupt and at the same time had your property repossessed , then this will have an impact. Most lenders will ask if you’ve ever been bankrupt or had a house repossessed and it’s essential to be honest here as they will check, which makes calling a bad credit mortgage broker even more vital for your chances of success.
How you have conducted your financial affairs since then
Lenders will search for evidence that you have kept your finances in good order since the repossession. They will not want see any negative event such as defaults or CCJs. They are very likely to be open to the concept of expanding credit to somebody who might have experienced problems before, but who can show that those issues have been a blip and things are now on a good standing for somebody who bad credit problems in the past.
Your current financial status
Your present financial position will be contingent on quite a few things. The most important one is how long ago did your financial issues occur. After six years, most adverse credit fall off your credit report and no longer be a problem.
Broadly speaking, people who have good credit records or less/no financial obligations could borrow more, regarding the amount and percentage of the property value, than people with lousy credit records or heavy financial obligations.
In case the repossession was four years ago or more and was also the sole adverse credit you endured, then things seem better , and you may expect to acquire a competitive mortgage rate whilst being expected to put down a deposit of 10 percent — or even in some instances, as little as 5%.
How we can help you
At Finbud, we’ve got a Specialist bad credit team which helps our customers secure an inexpensive mortgage following repossession. When you have got a less than ideal credit rating, then you’re best served with the select few adverse lenders you will not find on the high street. We have got several years of expertise working with a community of bad credit credit lenders across the united kingdom, therefore we understand where to find a mortgage that suits your needs, irrespective of your credit history. As a whole of market broker with access to exclusive deals, we can assist you in finding the best mortgage for you.
We can also assist you with your mortgage application and provide personalised mortgage advice. Get in touch now for free mortgage advice and no-obligation quotes from our team of experienced bad credit brokers.
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