Can I get a mortgage after bankruptcy?
Many people I speak too are delighted to find that after talking to me they qualify for a mortgage having been made Bankrupt as they assumed they would have to wait 6 years until it no longer appears on their credit file – you can get a mortgage the day after you have been discharged!
The saying time is a great healer is never truer than when applied to getting a mortgage. If you have an adverse credit history, the longer the period from when you were discharged from Bankruptcy, the better your chances are of getting a mortgage and being able to borrow more.
So how much can I borrow?
That depends on how long you have been discharged but firstly, you cannot have a mortgage if you are still a Bankrupt – you must be discharged, or have it annulled.
Detailed below are the loan to value limits for how much you could borrow from the date you are discharged.
70% – the day after you are discharged
75% – discharged for 1 year
80% – discharged for 2 years
90% possibly 95% – discharged after 4, 5 or 6 years
Property Repossessed in the Bankruptcy
If you had a property repossessed in the Bankruptcy and there was a mortgage shortfall, this will require further investigation by a lender. They would be concerned that if the lender were to find out you were applying for a mortgage, they could ask you to settle any outstanding mortgage. If this is case, please draw the repossession to my attention when we speak.
You can ‘cancel’ a Bankruptcy if you clear the debt within a certain time frame and this has the effect of putting you back in a good position, as though the bankruptcy never happened. For example, you could raise funds from the equity in your home before being made Bankrupt.
How long are you a Bankrupt?
Your Bankruptcy should only last for one year after which time, provided you have complied with the T’s & C’s of the Bankruptcy Order, you will be discharged. If you have not complied with the Order, for example not declared assets that could have been used to clear debt or withheld information from the Trustees, this could be extended. If this happens, lenders will take a dim view of this as you will not have been open and honest with your dealings with the Trustees.
Help To Buy Mortgages
I know of a lender that would consider you for a Help to Buy Mortgage up to 75% loan to value if you have been discharged for at least 1 year or another lender to 70% the day after you are Discharged!
If you’re looking for Help to Buy (H2B) Mortgage advice after bankruptcy, I can help. Find out more on Help to Buy Mortgages after Bankruptcy.
For more information on how I can help you please call me on: 01494 526400 or complete my online enquiry form.