Can I get a mortgage if I’ve been repossessed and have a new business?


Lucy James

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Dear Pete,

I’ve been reading the articles on the site and have a very complicated case! My house was repossessed during a divorce; even though I made payments to the lender my ex-husband didn’t make any repayments and as a consequence it was repossessed in January 2012. Otherwise full healthy credit history - no other adverse credit. Just to make matters more complicated I have changed from sole trader to limited company on advice of my accountant, I didn’t realise it would cause issues for my mortgage application at the time! I’m buying on my own but my new partner will be moving in with me, his credit is worse than mine so trying to do it just in my name if that’s possible? I have already agreed to purchase a new build so time is of the essence!

Caroline

Glasgow


Hi Caroline,

This certainly is a complicated case but fear not, we handle these daily!

In your case as the repossession is quite recent it’s going to restrict your options to a small number of lenders. Many never lend where there has been a repossession in the past, where others are happy so long as enough time has passed between the event and your mortgage application.

There are certainly lenders who will lend in this situation and the fact the rest of your credit history is healthy will add weight to the application.

The second point you raise about changing from a sole trader to limited company can again cause problems with many lenders. It can be frustrating from both a broker and a customer view point here as you have a business that is doing well so your accountant has recommended you go limited.  It’s obvious for most people to see it’s the same business making money in the same way, but most view this as a new company with no history, so will require 1, 2 or even 3 years’ accounts before they’d consider lending. Thankfully there are lenders who’ll consider the new company just an extension of your previous business, and as you are doing the same job we have specialists who can help in this situation.

The final point regarding your partner is also something we can look at, and lending depends on the details of any credit issues they have. If severe it may be possible to look at a sole application.

As this is very complicated we’ll need more detail to establish the best lenders, so we’ll hand you over to one of the specialists to take things forward.

Many thanks,

Pete

SUCCESS! After speaking to one of our brokers the client was able to secure a 2 year Fixed Rate of 1.58% at 75% loan to value and moved into the new property ready for the start of her sons’ school term.

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