At Enhanced Wealth Ltd we like nothing better than answering your bad credit mortgage questions!
Here is one that we received just last week.
I was repossessed 4 years ago and wondered if it would be possible for me to get a mortgage now and if so could I get normal product rates?
It’s a great question and one which we are asked frequently. The answer…………. it’s complex!!
On paper there is a lender that will accept Repossessions, Bankruptcy and satisfied IVA’s which are 4-years-old at normal rates of interest.
But……and there is a big but, the overall case has to make sense from a risk point of view. To give you 2 examples.
1: an applicant was repossessed 4 years ago. The applicant has a Bank Account with an overdraft, a mobile phone on contract and a couple of credit cards, albeit at higher rates of interest. Last year the applicant made a late payment on a credit card and this year went over the agreed credit card limit. In addition, a search by a pay day loan company has been registered on the applicant’s credit file.
2: an applicant was repossessed 4 years ago. The applicant has a Bank Account with an overdraft, a mobile phone on contract and a couple of credit cards, albeit at higher rates of interest. The overdraft has been used within agreed limits, as have the credit cards. More than the minimum payment is being made on the credit cards monthly and the balances are reducing.
In the above examples, applicant no 1 would be rejected at normal rates of interest because the overall credit position would appear to be in decline. Lenders that offer mortgage products at normal rates of interest in cases where adverse credit is historic, but still on file, always credit score.
This means that, unless an applicant has been “squeaky clean” since their credit “misdemeanour”, an application made to a lender that does not offer specific adverse credit mortgage products is likely to be rejected.
TOP TIP: Always seek the advice of an Independent Mortgage Broker and present a copy of your credit report.