Understanding your personal circumstances is vital in finding the right equity release plan for you.
Concerned About Getting a Mortgage After Bankruptcy? Here’s How We Can Help
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.
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?
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.
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.