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Bankruptcy Mortgages

Concerned About Getting a Mortgage After Bankruptcy? Here’s How We Can Help

Bankruptcy Mortgages

Securing a mortgage after bankruptcy can certainly be tricky and a common problem among borrowers. As with any type of bad credit, without the right help, bankruptcy can become a serious roadblock on the journey to property ownership.

The good news is that there are some specialist lenders out there who will consider applications from those who have been bankrupt. Here at Amber Mortgage Solutions we regularly help borrowers who have been declined elsewhere to find the finance they need.

For more information

Speak to our specialist advisers today.

01702 619 221

How Long Does Getting a Mortgage After Bankruptcy Take?

Many potential homeowners post-bankruptcy are often unsure whether they can apply for a mortgage, and if so, how soon after bankruptcy this can happen.

After a bankruptcy, the minimum amount of time a person should not apply for a mortgage is twelve months, as this is the usual amount of time before a bankruptcy can be discharged. However there are sometimes exceptions and a discharge can happen in less than twelve months, although this decision is up to the court. Once discharged, is can still be a matter of months or years of having a clean credit record before some lenders will even consider a person’s application.

Generally, the longer your bankruptcy has been discharged, the more likely lenders are to consider your application and offer a higher loan to value ratio (LTV). For example, someone whose bankruptcy was discharged over four to five years ago and has maintained a clean credit file since, may find that they are able to borrow up to 90-95% LTV and enjoy more competitive rates.

Whereas a borrower who was only recently discharged in the last 0-24 months may find the likelihood of them obtaining a mortgage is significantly reduced. Although in some cases, with a minimum of a 25% deposit a person still may be able to get a mortgage.

Here’s what our client’s have to say!

Improve Your Chances of Getting a Mortgage After Bankruptcy Discharge

Want to give yourself the best possible chance of a mortgage approval after bankruptcy? Then here a few things you can do to increase your chances of approval.

  • Check and Amend All Of Your Credit Reports
    It is of the utmost importance that you have all of your credit reports checked. The majority of lenders will use the following three credit reference agencies – Experian, Equifax and Call Credit. The information held on each of these credit files doesn’t always match, sometimes a result of creditors not updating their records. Due to this, some borrowers who are in fact creditworthy, are declined because their credit file wrongly shows them to have defaults and/or outstanding debts. So it is paramount that you have these checked and updated as soon as possible. Need help? Contact us today to speak with a member of our friendly team.
  • Check Your Eligibility
    Speak with an expert mortgage broker who will be able to tell you which lenders will consider your application in your current situation and whether or not you would qualify.
  • If Necessary, Rebuild Your Credit Score
    If it’s found that you are currently not eligible, then a professional mortgage broker will be able to tell you what steps you can take to remedy this. This could include saving for a slightly bigger deposit, waiting until your bankruptcy is discharged or having your credit report corrected.

The Hunters Report – What Is It?

A common mistake some potential homeowners make when looking for mortgages for discharged bankruptcy, is thinking that they can apply with any lender, as there is no longer any mark of bad credit or bankruptcy showing on their credit file.

They may pass the initial credit score and bank checks conducted by lenders, but then find that their application is declined further down the line. Why? This is a result of the Hunters Report.

The Hunters Report is a register showing anyone who has been made bankrupt in the UK, including those who have been discharged for over six years. Whilst this report isn’t used during the initial credit scoring, lenders will check this report later on, bringing the bankruptcy to their attention.

If you’re thinking about applying for a mortgage after a discharged bankruptcy, don’t worry, there are still lenders who will be willing to consider your application. To avoid the frustration of applying to the wrong lenders and stalling your property journey, why not let our dedicated team of bad credit brokers help to get you back on track?

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How Do My Credit Issues After Bankruptcy Affect My Mortgage Application?

With bankruptcy, any missed payments, defaults, CCJs, debt management plans, mortgage arrears or other forms of bad credit are effectively wiped from your credit file. After follows a year of being unable to borrow or take out any credit agreements. Once this time has passed and the bankruptcy has been discharged, borrowers are able to start afresh and rebuild their credit file.

However, if you start to accumulate bad credit after your bankruptcy then you are likely to experience serious difficulties in obtaining a mortgage. Whilst some lenders will overlook whether you’ve been bankrupt in the past, they are still looking for your more recent credit file to be clean. If you’ve had new bad credit issues since your bankruptcy, then most specialist lenders will consider you a risk and could very well decline your application.

In the right circumstances there are a few lenders who may still consider your application – we can help you find them.

Mortgage After Bankruptcy Lenders and Where to Find Them

Whilst a lot of high street lenders might not accept bankruptcies, there are discharged bankrupt mortgage lenders who can still offer competitive rates to borrowers with discharged bankruptcy.

For bankruptcy discharged less than three years ago, specialist mortgage lenders are the way to go. Whilst they may come with slightly higher fees and rates, if they are right for your situation and can get you to where you want to be on your property ownership journey, then they are well worth considering.

Want to learn more about which mortgage lenders accept bankrupts? Contact us today and one of our experienced brokers will be able to discover the best lender for you.

Buy To Let Mortgages After Bankruptcy

If it’s a buy to let mortgage after bankruptcy that you’re looking for, then ideally you will need to meet the following criteria:

  • you own at least one other property
  • you have a regular income (there is no minimum amount for this, but you will need at least one form of personal income, whether you are employed, self-employed or retired)
  • you have at least a 15% deposit
  • your bankruptcy has been discharged for three years or more and you have had a clean credit report since

Want To Repay Bankruptcy Debt With Equity In Your Home?

If done in the correct way and within a set timeframe, bankruptcy can actually be removed from your credit record if you are able to repay a bankruptcy debt.

This is known as annulment and whilst it is rarely done, if a borrower is able to do this and get their debts back up to date, it can be life changing.

Finding the best lender in this situation can be difficult, depending on the reason for bankruptcy. For example, if all of your personal borrowings were up to date (loans, credit cards etc.) but you had bankruptcy pushed onto you as a result of owing a tax bill whilst self-employed, then there are some secured loan lenders who would help you to refinance in order to get your finances settled. This would then enable you to borrow enough to remortgage at a later day without the bankruptcy and with a clean credit file.

On the other hand, if you have missed payments and defaults on multiple accounts then the chances of a mortgage lender assisting you are very small.

If you’re looking to settle your bankruptcy and want to know if you’d be eligible to secure lending with a specialist secured loan lender, then it would be worth talking with one of our professional advisors, so get in touch today!

Finding The Best Mortgage After Bankruptcy

Looking for a mortgage broker after bankruptcy? Then look no further!

Here at Amber Mortgage Solutions we take great pride in helping our clients to secure the best possible mortgage after bankruptcy and foreclosure, and are regularly approached by potential borrowers who are looking to buy a property or remortgage after bankruptcy.

So no matter what your credit issues may be or where you currently are on your property ownership journey, we are confident that we can help to give you the best possible chance of successfully securing you a mortgage after bankruptcy.

Speak to your friendly mortgage advisor

Call Us On

01702 619 221

Open: Monday - Friday 8:30am - 5:30pm

How Do I Know if I Have a Bad Credit Rating?

For some, they may have no real idea they have bad credit until they are declined a mortgage by a high street lender for the first time.

However, for others it may come as less of a surprise to learn that their credit history is far from perfect. You may be receiving letters from credit card companies, are aware of missed payments or are being visited by debt collectors.

The only way to know for sure what condition your credit history is in, is to secure a copy of your credit report.

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How to Access Your Credit Report

It is now easier than ever to obtain your own credit report and see for yourself how you might fare in getting a mortgage.

Once a mortgage application is submitted, the lender will access your credit file information to assess your suitability for a loan. So, if you’re concerned about having adverse or bad credit, we would encourage you to take action sooner rather than later, and obtain a copy of your credit report. This can be done for free, from a wide range of trusted online providers.

Need help getting your credit report? Contact us today and speak with a member of our friendly team for advice.

I Have a Bad Credit Rating – How Much Can I Borrow?

When looking at how much a person can borrow, the first thing many lenders will examine is your ability to afford the loan. This means they will need to look at your income – or income(s) if it’s a joint application – as well as your regular outgoings and other credit commitments.

In addition to looking at affordability, a lot of lenders will also consider your maximum income multiple. For example, 4x or 5x your income(s), depending on the lender.

With lenders now using such diverse methods to assess the extent to which you can afford a potential loan, the best way to prepare would be to discuss your situation with one of our professional advisors.

Having experience of working with bad credit lenders, we can guide you on your next steps to getting the mortgage you need.

Quick FAQs

Have a question about mortgages after bankruptcy?

Take a look at our extensive FAQ section for the answers to some of our most commonly asked questions, below.

With an undischarged bankruptcy you will be subject to a number of restrictions. You may find it difficult to open a new bank account for up to twelve months and will be unable to apply for any form of credit without declaring your bankruptcy first, which means that with an undischarged bankruptcy a mortgage won’t be an option for now. Instead, use this time to start saving towards a deposit.

Generally, the older your discharged bankruptcy the more likely lenders will be to approve your application.

Bankruptcies usually last for twelve months, remaining on your credit file for six years. However it is worth remembering that no matter how long ago your bankruptcy was, you will still need to declare this to potential lenders.

When it comes to joint mortgage applications, even if only one partner has a discharged bankruptcy – and the other has a completely clean credit record - it will still have an impact.

One thing you can check is whether your credit records are linked. This could be a result of previous joint applications that you have made, for credit or even utilities.

To check this you can ask for copies of your credit report (you can find this from one of the three main UK credit reference agencies – Callcredit, Equifax and Experian) and see if your names are linked together by ‘financial association’. If this is the case, but you don’t have any existing joint credit, then you can complete a ‘financial disassociation’ form to sever the link.

If you are applying for a mortgage and a lender asks if you have ever had a bankruptcy on your record, then yes, you should declare it. If the bankruptcy has been removed from your record and you are not asked about it, then it won’t have an effect.

If you have ever been declared bankrupt, then this will affect the loan-to-value ratio (LTV) mortgage lenders are willing to offer you. In the immediate 12-24 months after discharge you may be required to put down a deposit as high as 30%. As more time passes however, this should begin to go down. After two to three years you can expect to put down 20%, after three to six years it might be 15% and then after six years, it could go back to as little as 5%.

Contact us today! Our friendly advisors will be happy to talk you through the next steps available to you and help you on your way to obtaining the mortgage you need.

We’re here to help you, not judge you, so call us on 01702 619 221.

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