Mortgage and Bankruptcy

Bankruptcy can cause real problems if you’re looking for a mortgage. The mainstream lenders will consider you to be high risk, and risk is one thing high street lenders really do not like. As such, the rates you’ll be offered, if they offer you a mortgage at all, will be higher than you would otherwise pay.

However, mortgages for discharged bankrupts are available; it’s just a question of knowing where to look. There are currently a handful of mainstream lenders, and a number of specialist lenders that are happy to consider people who have been made bankrupt for a mortgage. And yes, a mortgage after a bankruptcy will cost you more, but there are a few ways to reduce this cost.

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We work with a network of specialist mortgage advisors who can help you find a mortgage if:

  • You’ve been discharged from your bankruptcy for 1 – 6 years or more;
  • You have a history of bankruptcy and repossession;
  • You’re a discharged bankrupt with a large deposit
  • You’re looking for remortgages after bankruptcy
  • You want a buy-to-let mortgage following bankruptcy

What should you do before applying for a mortgage?

One of the most important rules of mortgage and bankruptcy is to check your credit report before you apply. It’s likely that following a bankruptcy your credit report will contain inaccuracies that could inflate the rate you’re offered, or cause the lender to decline your application altogether.

To avoid this, it’s well worth ordering your credit reports and checking them thoroughly before you apply for your mortgage. The two main credit agencies are:

If you do find inaccuracies with your credit report, contact the reference agency immediately as it can take a number of months to correct.

Many potential homeowners searching for remortgages after bankruptcy or mortgages for discharged bankrupts are unsure how much time has to pass before they can apply for a mortgage. The terms of a bankruptcy dictate that you must be discharged from a bankruptcy before you can apply for a mortgage. The bankruptcy period usually lasts 12 months, although this can be reduced depending on the court’s decision. Once you’ve been discharged, the amount of time that must pass before you’re eligible for a mortgage differs from lender to lender.

The longer you’ve been discharged, the more lenders they’ll be that will consider your application. If you’ve been discharged for 4/5 years and have an excellent credit history after the bankruptcy, you might find you’re able to borrow 80% loan-to-value, just like any other borrower. Those discharged for 1-2 years will find it more difficult, but they should still be able to find a mortgage with a 25% deposit.

How can we help?

If you’ve been made bankrupt in the past and are looking for a mortgage, we can help. Each lender and customer is different, so without knowing more about the specifics of your situation it’s impossible to say which lender will have the best deal for you.

However, there are more several lenders offering mortgages for discharged bankruptcies, so please complete an enquiry and an advisor will be in touch to discuss the right deal for you.

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