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Mortgages After Bankruptcy

Can I get a mortgage after bankruptcy?

Some lenders may consider offering mortgages after bankruptcy, but this will depend on many factors such as the amount of deposit or equity, dates of the bankruptcy, discharged date and credit use since.

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Mortgages for Discharged Bankrupts

Just Mortgage Brokers have been assisting customers to obtain mortgages for discharged bankrupts for many years.  Finding yourself in a position of being made bankrupt can be a daunting and stressful time with much concern of what the outlook will be upon its discharge for borrowing.  Although it will undoubtedly have an impact with some mortgage lenders flatly refusing, there are lenders in the market who have a more understanding approach with some even considering an application on day one of the discharge.  Do however expect to need a larger deposit or amount of equity in your home to qualify.

Why is it difficult to get a mortgage when bankrupt?

When applying for a mortgage a lender will make an assessment using many factors of your personal circumstances including your past credit history.  If a record of a bankruptcy is declared this indicates to the lender that the applicant has historically had debt problems and as such likely to represent a higher risk.  When assessing this risk it may be deemed too high for some lenders and as such they will decline an application.  You will also likely find that certain borrowing restrictions are imposed upon you during the bankruptcy period.  The good news however is that following a discharge from the bankruptcy, that is typically after 12 months, although it will still have an influence over your options it may now be possible to obtain a mortgage.

Getting a mortgage after bankruptcy

Many people are, as perhaps expected, concerned about getting a mortgage after bankruptcy.  Whilst it is true that some lenders will simply decline anyone who has been bankrupt in the past there is still choice in the market.  The date an applicant was discharged will feature heavily in which lenders will be available with the more historic the better the choice.  At the time of writing virtually all lenders will consider an application after 6 years with much choice still on the market after 3 years.  Although the options would now be limited, there are lenders who will look at customers who have been discharged for 12 months and even on day one, although do expect much tighter criteria for the latter.

How soon after bankruptcy can I get a mortgage?

Whilst some lenders in the market will refuse an applicant who has been made bankrupt in the past regardless of the circumstances and time frames involved, the good news is that this does not apply to the whole market.  Virtually all lenders will consider an applicant after 6 years of discharge and the following gives an idea of the time frames together with the typical minimum deposit/amount of equity required for some of the high street and many specialist lenders (correct at time of writing).

6 years – 5%

4-5 years – 10% possibly 5%

3-4 years – 15% possibly 5%

2-3 years – 15% deposit

1-2 years – 25% deposit

Day one – 50% deposit

Can I remortgage after bankruptcy?

Whilst in a current bankruptcy it is extremely unlikely that you will be approved for a remortgage. Indeed you will likely find that certain restrictions will be imposed upon you as part of your bankruptcy order.  However when you are discharged it may then be possible to remortgage.  In fact at the time of writing it is possible to obtain a mortgage on day one of your discharge but do expect this to be with a very large deposit if buying a property or with a large amount of equity in a current home and with some fairly strict criteria for approval.  Following 12 months from discharge rates and choices tend to become better with this trend continuing, offering possible usual high street rates and 5% deposits after 3-4 years.

Best mortgage lenders for discharged bankrupts

At Just Mortgage Brokers we get many enquiries from customers asking who the best mortgage lenders are for them as they are discharged bankrupts.  Although on the face of it this appears a simple question it does not come with a simple answer. In general terms the best mortgage lenders for discharged bankrupts will be those that offer the potential borrower the most favourable product for their needs at that time.  Many factors will therefore have to be taken into consideration that will include the client’s full current and past financial situation into account. The specific focus in regard to the bankruptcy will be when the client was discharged and how much deposit or amount of equity they have.  If you are a discharge bankrupt why not get in contact with us today and ask about your possible options.

Can I remortgage to pay off my bankruptcy?

People find themselves in a position of being made bankrupt for many different reasons.  In some instances it may be beneficial for your bankruptcy and bankruptcy expenses to be repaid in full and in turn cancelled.  This is referred to as an annulment and legally puts you back in the same position as you would be before the bankruptcy order was registered.

During your bankruptcy it is highly unlikely that you will be able to remortgage you home using a standard mortgage however, there could be options via specialist second charge lenders who will consider this purpose.  This may then assist your credit rating and enable you to transfer the lending to a main mortgage if this is the best thing for you in the future.

Although this may look a favourable option and can be very beneficial for some, please ensure you get professional advice prior to proceeding.

Specialist mortgage brokers

The phrase specialist mortgage broker can encompass a multitude of meanings however in simple terms this best describes a mortgage adviser that predominantly focuses on one specific aspect within the market.  This could be in relation to bad credit mortgages or limited company buy to lets to name but two.  By dealing with a specialist mortgage broker you should be safe in the knowledge that as this is their area of expertise, that they will be best placed to assist you in regard to your borrowing needs.  At Just Mortgage Brokers we look to have teams of specialist advisers who focus on their respective areas and who also have the support of other team members who specialise in their areas to assist in any cross over business thus ensuring expertise is at hand regardless of a customer’s requirements.