I am a discharged bankrupt what are my realistic chances of getting a mortgage?
If you type in ‘bankruptcy mortgages’ into Google we will appear on the first page. This means that we receive constant and high level of enquiries from ex-bankrupts looking to obtain a mortgage.
Importantly: this article is based on current market conditions unlike most of the other sites in Google which are outdated giving false information and hope to clients.
In this article I will give you guidance on what you need to get a mortgage after bankruptcy. As we specialise in getting finance for people who have had credit problems we can speak on this topic with authority. We therefore expect this mortgage bankruptcy guide will save you valuable research time.
How long do I need to wait after my bankruptcy discharge before I can apply for a mortgage?
The good news is it is only a matter of days.
I’m a discharged bankrupt – will my interest rate be higher than the norm?
The rates are higher than normal if the bankruptcy discharge took place in the last years. The better news is often the early repayment charges are light or non-existent meaning we will look to remortgage you as soon as possible onto conventional terms.
Does my reason for going bankrupt affect my mortgage chances?
The reason why you filed for bankruptcy is pivotal in your mortgage eligibility. It is vitally important to portray a sensible rationale for why you became bankrupt and that you can demonstrate that this was an isolated occurrence. The lender will need to be assured that ordinarily you are ‘on top’ of your finances and can service debt. For example, the bankruptcy could be attributed to major incident in your life e.g. messy divorce, business going under, unexpected tax bill or long-term illness. If however, the reason was you amassed loan-upon-loan without contributing, just hopping to the next fix, then the chances are the mortgage lender will take a dim view.
Is my credit conduct important since my bankruptcy?
In short ‘yes’. If you have adverse credit that post-dates your discharge then it is highly likely that it is a ‘straight mortgage decline’. From the lender’s point of view it demonstrates the opposite of what they are looking for and they will conclude that you are financially irresponsible.
Does job stability improve my chances of getting a mortgage after bankruptcy?
Absolutely, particularly if it was not connected to the reason for bankruptcy e.g. failed business and started up again in the same basis.
How much deposit would I need to get a bankrupt’s mortgage?
This is probably the area of most misinformation on the net. If the bankruptcy discharge period is under three years you are looking at 30% to 50% deposit to secure a mortgage.
If the bankruptcy period was over three years then in theory as little as 15% may be sufficient.
If you cannot provide this level of deposit I suggest you wait, and save up, and stop wasting your time researching different options.
I would also add ‘regular savings’ is much more palatable to a mortgage underwriter. Gifts from immediate family can be considered but are viewed less favourably.
How much can I borrow?
In the region of 3.5 times income if the bankruptcy discharge was in the last three years. If the discharge was older 4 to 5 times income.
Why do I need to use Niche Advice to get a bankruptcy mortgage?
In short ‘you don’t’. This can however be a minefield. One wrong statement to a lender can result in a decline. And, when you are talking about a small amount of active lenders in the bankruptcy space you can run out of options pretty quickly.
We have a proven track record of successful bankruptcy mortgage placements and importantly the relationships with the decision makers. If you think you can do it yourself good luck, and I hope that my article has helped in some way, but you will have a long bumpy road ahead.
How much do you charge to obtain a mortgage after bankruptcy?
I believe in being transparent with all of our clients. Let’s be honest if you have been through a bankruptcy you are likely to have been to hell and back and on the way have swam with a lot of sharks.
I charge 1.5% of the loan size. Which I believe wholeheartedly to be representative of the additional work involved with mortgage cases of this complexity. Furthermore, I’m so confident of my ability to deliver that this is only payable once the mortgage has been successful and the funds released.
There are no upfront charges whatsoever. This means you only pay us when you have actually bought your property and the solicitor has told you that the deal has completed.
As mentioned before we have lots and lots of enquiries a day from ex bankrupts wanting to get a mortgage and the temptation would be to charge an admin fee upfront knowing that the case will not go anywhere, and we would make quiet a lot of money without doing anything. But I’m not here for a fast buck, I want to help, graft, and I’m prepared to be paid on positive results.
My strong preference would be that you use our solicitors who are accustomed to bankruptcy mortgages. That way, I can keep control of the whole spectrum of the case, prioritise, and have direct input where necessary.
So there you are…you should now have all the facts about getting a mortgage after filing for bankruptcy.
For more information on how we can help ex-bankrupt applicants and source a lender who is willing to lend to them after being discharged, please contact us on T: 0207 993 2044 or alternatively complete the simple enquiry form on the top right hand side of this page.
(Please make sure you also have an up-to-date Equifax Credit Report ready to email to us. To get your Free Report please click on the link image)
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.