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Mortgages for discharged bankrupts

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Home Bad Credit Mortgages for discharged bankrupts

Mortgages for discharged bankrupts

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About Martin Alexander

Martin has been a mortgage advisor for over 15 years. Check to see if you qualify or call us on 0800 195 0490.

Last Updated on 18th October 2020

Our advisors have helped many clients to find suitable mortgages after bankruptcy. It isn’t uncommon for applications to be declined by regular brokers and lenders. A mortgage after bankruptcy would most likely need an advisor who specialises in adverse credit.

Our specialist advisors have a wealth of experience in finding mortgages after bankruptcy, even if you’ve been declined before. We know exactly which lenders would be prepared to lend after bankruptcy and can see your application through from start to finish.

Bad credit can be a red flag for most lenders. Any mention of bankruptcy is considered to be a severe credit issue. This doesn’t mean every lender is the same. There are a handful of lenders that may see past your bankruptcy. There are also specialist lenders who solely focus on bad credit mortgages.

Expert Mortgage Advisor can help you with the below:

  • Mortgage after bankruptcy (minimum 5% deposit)
  • Buy to let mortgage after bankruptcy
  • Remortgage after bankruptcy

You can speak to an advisor now by calling 0800 195 0490 or filling out our quick form.

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The link between time, bankruptcy and mortgages

Obtaining a mortgage after bankruptcy has a lot to do with time. Once bankruptcy has taken place, you won’t be able to apply for a mortgage until you’ve been officially discharged.  The time frame involved with being discharged from bankruptcy is usually 12 months but can be less in some cases. Once discharged, lenders may approve you a mortgage, especially as more time passes.

If you apply for a mortgage straight after discharge, mortgage approval is possible. Nonetheless, your mortgage assessment will follow very strict guidelines. It’s important your application is presented in the best way and to the right lender. This is to maximise your chances of approval.

Please note: If you’ve just been discharged (one year or less), lenders will require you to have a substantial deposit and may charge you higher rates than normal.

As each year goes by, your bankruptcy becomes more distant and less relevant in the eyes of a lender. Lenders may offer you better rates and fees, along with approving mortgages with lower deposits.  If you’ve been discharged from bankruptcy for around four years, then most lenders will see as you as no different to anyone else, especially if your credit history has been kept intact. This means that after four to five years, you could be eligible for great rates and should only require a 5-10% deposit.

If you’re still unsure about whether or not you’ll be eligible, our specialist advisors are available to discuss the mortgages you may qualify for.

Tips for applying for a mortgage after bankruptcy

The last thing you’d want to do after bankruptcy is to rush into a mortgage without speaking to a specialist. You’ll be considered as a high-risk applicant and will therefore need to proceed with caution.

Check your credit reports

Our experts would recommend the first thing to do, is to check your credit score. Websites such as Check My File allow users to check all 4 major credit reports. This is important because your credit reports may show irregularities with your financial profile. We’ve often seen vital information that has been incorrectly documented in a client’s credit report, such as dates of bankruptcy discharge being inaccurate.

As we’ve discussed, time frames are important. Having incorrect discharge dates on your credit file can make mortgage approval increasingly difficult. Irregularities such as these can occur due to basic admin errors from creditors, which is more common than you may think. It may seem like a simple check, but it is crucial, as this could result in you being declined for a mortgage after bankruptcy.

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Beware the National Hunter Database

The National Hunter Database is generally an anti-fraud register, but will have a record of anyone that has faced bankruptcy. The majority of lenders will run a report on the database, along with a credit check. You may pass a credit check, however bankruptcy can ring alarm bells for certain lenders.

Even if the bankruptcy was over six years ago, some lenders will simply decline. This means borrowers can pass the initial stage of getting a decision in principle, but then fail on getting their mortgage offer. This can be a costly mistake as you may have already paid lender fees such as survey fees and broker fees.

Many people we’ve spoken to have been declined for this reason, as not all lenders will approve a mortgage after bankruptcy. This doesn’t mean that you can’t get a mortgage after bankruptcy, it means you must apply with the right lender. This brings us on to our next point.

Credit issues after bankruptcy

Any credit issues before your bankruptcy such as defaults, CCJs, late payments or a debt management plan, should be settled, as this is the purpose of accepting bankruptcy. Bankruptcy acts as a mechanism to reset your credit file and following the discharge you’re able to rebuild your credit file from a clean slate.

If you’ve encountered new financial issues which have impacted your credit file, then it becomes even more difficult to get a mortgage. Don’t be disheartened as there are still lenders who may approve you. That said, the majority will at least want to see an impeccable credit file since the discharge. Having further bad credit since your bankruptcy, heavily narrows the lenders in the market that you’ll be able to approach.

If you find yourself in this situation, it’s paramount that you speak to an advisor before making an application. The last thing you want to do is take a chance with a lender at random. This can severely hamper your chances of being approved a mortgage after bankruptcy.

Buy to let mortgage after bankruptcy

If you need a buy to let mortgage after bankruptcy, then speak to one of our mortgage advisors. Bankruptcy is a specialist area, so you’ll more than likely need a specialist by your side. A specialist advisor can drastically improve your chances of getting a mortgage. Our advisors are more than likely to be able to obtain you a mortgage if you:

  • have had clean credit since your discharge
  • have been discharged for 3 years
  • saved a 20-25% deposit
  • are already a homeowner
  • can prove an income (employed, self-employed or retired)

If you don’t meet the above criteria, our advisors may still be able to help. A mortgage after bankruptcy is a specialist field and often requires specialist knowledge. Remember, you can ask our advisors a simple question by using our quick form.

Mortgage advice for discharged bankrupts

As specialist mortgage advisors, we know exactly which lenders are likely to lend you a mortgage after bankruptcy. Even if you can pass a credit check, certain lenders may not allow bankruptcy and therefore decline your application.

Based on your situation we can pinpoint the exact lenders that may find you eligible for a mortgage after bankruptcy. We can also avoid lenders that we certainly know won’t approve you a mortgage. saving you time, money and frustration.

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