How to find a mortgage after repossession

Updated February 21, 2017

It's challenging to secure a home loan after your car or other property has been repossessed. Mortgage lenders checking your credit history to see if you qualify for a loan will notice the repossession and proceed with caution. A past repossession indicates financial and credit problems, so lenders will classify you as a "high risk applicant." Still, there are ways to improve your chances of getting a mortgage approval.

Maintain good credit after the repossession to help you get a mortgage loan. Quickly begin improving your credit score after the repossession to improve your odds of getting a home loan. Pay remaining creditors on time every month and work to pay down your debts.

Keep records of your income. Having sufficient income and steady employment can compensate for past credit problems. Be employed for at least two consecutive years and keep copies of W-2 statements for the previous two years.

Generate cash for your down payment. Plan to spend money on a down payment if you are approved for a mortgage loan after a repossession. Down payments vary depending on the loan, ranging between 5 and 20 per cent of the sale price.

Apply for an FHA home loan. Mortgages offered by the Federal Housing Administration help people with past credit problems, and you only need a credit score of 620. Discuss options with a broker or mortgage officer to see if you qualify for an FHA home loan.


FHA home loan lenders may require a two-year waiting period after a repossession before you can apply for a mortgage. They may also inquire about the circumstances that led up to the repossession. Using a co-signer or joint applicant can help you acquire a home loan after a repossession.

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About the Author

Valencia Higuera is a freelance writer from Chesapeake, Virginia. She has contributed content to print publications and online publications such as, AOL Travel, and ABC Loan Guide. Higuera primarily works as a personal finance, travel and medical writer. She holds a Bachelor of Arts degree in English/journalism from Old Dominion University.