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  • FIRST POST
    The_Lorax
    how to get a mortgage after bankruptcy
    • #1
    • 11th Dec 10, 7:38 AM
    how to get a mortgage after bankruptcy 11th Dec 10 at 7:38 AM
    You too can get a mortgage after bankruptcy.
    I have just bought a house for £250k after being declared bankrupt in April 2005. Conventional wisdom that Bankruptcy ends your chances of ever getting a mortgage is just not true but there are some golden rules to follow.
    If you want to know how I did it, read on.
    Golden Rule One Ė Sort your life out.
    Iím not here to judge, I went bankrupt through a combination of bad luck, greed, laziness and burying my head in the sand. The important thing is learn from your mistake.
    Since then my wife and I have been pretty much perfect customers, pay all your bills on time, live within your means. When you can get a credit card use it but pay it off every month. I used mine just for petrol and paid in full as soon as the bill came in. when the time is right apply for catalogues and do the same. You need to rebuild your credit footprint by getting the low end low value lending and making the most of it.
    We owned a house and my wife had to get a loan from the bank to buy out my half of the interest in it. We scrimped and paid that off in half of its planned term. It was not easy but it hugely increased her customer score at her bank.
    Likewise I left lots of money in my account as long as I could to look like a stable character.
    Do your life laundry; cut your outgoings, find bargains, it all helps. Check your credit file with a fine tooth comb. Make sure that each lender shows your account as settled or partially settled and with the settlement date as the date of your bankruptcy discharge. I had several that had either not put it as settled or had it showing as settled years after discharge. This has the effect of making you look as though your money troubles have continued since bankruptcy and will make any financial institution give you a very wide berth. It can be difficult to get it corrected but persist using all the advice on the rest of this site as it is essential.
    Final tip here if you owed a lot of money when you went bankrupt you probably had PPI. I had a loan from my bank pre BR which they said I had to take out PPI for or they wouldnít let me have it. When I complained to the Financial Ombudsman I got £3,000 back which enabled me to replace my car when it died without having to borrow money.
    So rule one, sort your life out. If you havenít done this, donít even bother with the rest.
    Golden Rule Two: Persist
    I went to a broker on a personal recommendation; someone who purported to be experienced in my kind of case. He told me I had no chance and would have to wait at least another year and even then wouldnít be able to afford a house at more than £200k. (His name was Jon Shaw from Positive Solutions Ė donít even bother)
    A good friend of mine told me not to give up but to phone around mortgage companies myself. I phoned as many as I could find. In the end I phoned 84 different mortgage providers and 18 said that they would consider me. I have listed them at the bottom but you have to do it for yourself. They judge it on individual circumstances and they change their policies all the time.
    Golden Rule Three: Do your research
    At this stage donít give your real name (you donít want to leave footprints and some of them will want to do a soft search on you.) but be completely honest about everything else. First explain how long you have been discharged and your position and ask whether they will consider you. If they say yes then you need to know what their lending policy is. Some still do multiples of income, most say they base in on affordability the reality is that they are all different. Some will give you a formula, some will ask you for your details and then say how much you can borrow without telling you how it is worked out, some wonít go that far without running a credit check.
    The next stage is to ask how they assess customers. Some do a hard computerised credit score. This is likely to be a problem for you. Firstly you have an adverse history so it will probably knock you out, second it will record a visible search on your file. If you apply for a mortgage and another lender searched you two weeks ago then the second lender can be pretty sure the first one said no and mark you down for it.
    Other lenders use a combination of scoring and other techniques. If you have an account with a lender already they will take into account your customer score which is internal to that institution.
    For me, the best bet was to go with a building society that didnít score at all. Instead they got full credit files for myself and my wife and went through them with a fine tooth comb. They also went through bank statements, payslips, everything. They raised lots of queries, wanted to know what certain payments were for. The bottom line is that a human being came to a judgement about whether I had sorted my life out and decided I had.
    Everyone is different though and so what worked for me might be different for you. Try to get the people from the lenders talking, explain what you are doing. Some will be friendly, some downright snooty and rude. The friendly ones, however, can give you some really useful information.
    Donít go with the first one you find. Go through all the lenders you can find and then make us a short list. Prioritise them. If necessary ring round again and get further details.
    Ultimately you will get down to a handful that look really promising. Then decide who you are going with. It can still break down even at this point. I didnít get a mortgage with the provider at the top of my list and you might not either.
    Golden Rule Four: Donít ever give up!!
    You are then faced with an agonising time of sending information back and forth but hopefully it will be worth it.
    I moved in October 2010. I earn about £45k a year. I bought a house for just under £250k on an 80% mortgage; the other 20% came from equity in the house I already owned. i'm now paying £1021 a month for my mortgage.
    Getting a mortgage is not easy after a bankruptcy but if you get yourself sorted it is possible so donít give up.
    The lists of those I rang and those who said yes are below BUT EVERYONES DIFFERENT SO YOU HAVE TO DO YOUR OWN RESEARCH

    If you want to know any more, just ask.

    Good Luck!!
    The people I rang were:
    Royal Bank of Scotland
    Cheltenham and Gloucester
    Halifax
    Manchester Building Society
    Yorkshire Building Society
    Abbey
    One Account
    ING Direct
    HSBC
    First Direct
    nationwide Buiding Society
    newcastle Building Society
    Scottish Widows Bank
    Barnsley BS
    Cambridge BS
    Chorley & District BS
    Coventry BS
    Natwest
    Britannia
    GMAC
    Mortgage Express
    accord
    aldermore
    alliance and Leicester Direct
    Bank of Ireland (NI)
    Bank of Scotland (Mortgages)
    Beverley
    BM Solutions
    Buckinghamshire Building Society
    Chelsea BS
    Cheshire BS
    Clydesdale Bank
    Cumberland
    Darlington BS
    Derbyshire BS
    Direct Line
    Dudley BS
    Dunfermline BS
    First Active
    Furness BS
    Hanley Economic BS
    Intelligent Finance
    Ipswich BS
    ITL Mortgages
    Kensington
    Kent Reliance BS
    Leeds BS
    Leek United
    Legal & General Mortgage Club
    Lloyds TSB
    Loughborough
    Mansfield
    market Harborough BS
    Marsden
    Melton Mowbray
    Monmouthshire BS
    National Counties BS
    Natwest
    Newbury BS
    Northern Rock
    Norwich & Peterborough BS
    Nottingham BS
    Pink Home Loans
    Platform
    PMS
    Post Office Ltd
    Principality BS
    Progressive BS
    Saffron BS
    Scottish BS
    Shepshed BS
    Skipton BS
    Stroud Swindon BS
    Teachers BS
    Co-operative Bank
    Mortgage Works
    Tipton & Coseley
    Vernon
    West Bromwich Building Society
    Woolwich (Barclays)
    Yorkshire Bank
    Bath investment and BS
    Chesham BS

    The ones that said yes were:
    Norwich & Peterbororgh
    Saffron BS
    /skipton BS
    Tipton & Coseley
    Cheltenham and Gloucester
    Halifax
    Manchester BS
    Yorkshire BS
    Barnsley BS
    Cambridge BS
    Coventry BS
    Clydesdale Bank
    Dudley BS
    Furness BS
    Kent Reliance
    Leeds BS
    Leek United
    Mansfield

     
     
Page 6
    • Cobalt77
    • By Cobalt77 24th Nov 15, 2:29 AM
    • 234 Posts
    • 227 Thanks
    Cobalt77
    What makes you say that?
    Originally posted by alltaken
    If you check his post history, Rrushi Shqiptar seems to be making quite a few rather illogical posts recently.
    • Rrushi Shqiptar
    • By Rrushi Shqiptar 24th Nov 15, 2:37 PM
    • 308 Posts
    • 99 Thanks
    Rrushi Shqiptar
    If you check his post history, Rrushi Shqiptar seems to be making quite a few rather illogical posts recently.
    Originally posted by Cobalt77
    What makes you say that? Why are they illogical?
    Maybe they are illogical as they maybe a question or something that needs clarifying.

    I dont think that was a very fair thing to say btw Cobalt77
    I love green dots I hate red dots
    • pjc402
    • By pjc402 25th Nov 15, 4:04 PM
    • 3 Posts
    • 1 Thanks
    pjc402
    After the discharge period obviously Rrushi after 12 months you are free of obligations with regards to assets and contributing towards your debts in 90% of cases including my own.
    • diezeltruck
    • By diezeltruck 3rd Jan 16, 11:42 PM
    • 1 Posts
    • 0 Thanks
    diezeltruck
    Which Lender
    Very informative post Lorax. Would you mind saying which lender gave you a mortgage offer

    Thanks
    • Somerset La La La
    • By Somerset La La La 13th Jun 17, 1:38 PM
    • 446 Posts
    • 141 Thanks
    Somerset La La La
    Anyone got any more experience regarding statement requirements? Or going with Nationwide for lending?

    I've got at least 10 current accounts, including several former-prime accounts that banks are happy for me to keep (but with don't lend markers on them).

    So I transfer my salary from 1 account to another to hit funding targets (e.g. Lloyds £1,500 paid in, to get credit interest & free cinema tickets. TSB £500 to get credit interest, Halifax to get the £3 reward).

    I'm thinking I'll probably go with Nationwide, as long as lending criteria stays the same (accepted from 3 years discharged, no max LTV for ex-bankrupts).

    As they'd be my main bank account I know they do electronic checks of their account statements... just hoping they won't want me to reel off 50 pages of statements for all other accounts!
    Ex-Bankrupt, Discharged 09/2015
    Capital One - Jul 2016, £3,750 Never ending 0%....
    Aqua Reward (0.5% Cashback) - Nov 2016 - £1,950
    Vanquis Chrome 24.7% - July 2017, £1,000
    Car Loan - Sept 2017 - £15k outstanding, early settlement = £10k....
    Rebuild for Mortgage (10/2018)
    • mwarby
    • By mwarby 14th Jun 17, 7:21 PM
    • 804 Posts
    • 301 Thanks
    mwarby
    I found that despite meeting the criteria (as best as I could tell) I was declined for a 95% decision in principle. I appealed and was still rejected, as 95% was high risk, what LTV I could get I was unable to find out.

    Edit this is for Nationwide
    • barracuda1986
    • By barracuda1986 1st Dec 17, 10:25 AM
    • 4 Posts
    • 0 Thanks
    barracuda1986
    Hi guys
    Sorry to drag this thread back up, but reading through it has given me a lot of hope! I was made bankrupt in Feb 2012 and discharged in Oct 2012, so not long with it left on my credit report then it's gone forever.
    I'm wanting to apply for a mortgage, and I am a first time buyer. We've already been speaking to a broker who didn't really seem like they wanted to help after weeks of going backwards and forwards, spoken to another broker today and not getting anywhere either. It seems that the biggest issue is we'll need a bigger deposit, which although I'm working and earning good, we need to move from where we are at the moment sooner rather than later. Ideally we need a 90-95% mortgage.


    I have rung Yorkshire Building Society this morning and they couldn't tell me they're lending criteria over the phone and gave me the only option to apply for a DIP and hopefully we would get accepted.


    Can anybody advise me further?
    • mb78
    • By mb78 1st Dec 17, 11:54 AM
    • 33 Posts
    • 12 Thanks
    mb78
    Hi guys
    Sorry to drag this thread back up, but reading through it has given me a lot of hope! I was made bankrupt in Feb 2012 and discharged in Oct 2012, so not long with it left on my credit report then it's gone forever.
    I'm wanting to apply for a mortgage, and I am a first time buyer. We've already been speaking to a broker who didn't really seem like they wanted to help after weeks of going backwards and forwards, spoken to another broker today and not getting anywhere either. It seems that the biggest issue is we'll need a bigger deposit, which although I'm working and earning good, we need to move from where we are at the moment sooner rather than later. Ideally we need a 90-95% mortgage.


    I have rung Yorkshire Building Society this morning and they couldn't tell me they're lending criteria over the phone and gave me the only option to apply for a DIP and hopefully we would get accepted.


    Can anybody advise me further?
    Originally posted by barracuda1986
    I was discharged in 2012 same as you and last year had a Mortgage for £150k from Skipton no problem.

    Don't bother even looking at the typical 'high street' lenders as they won't touch you.

    Skipton will allow people 4 years after Discharge, but alot of this will come down to how much Deposit you have. We had a pretty healthy one so this prob helped.

    Knowing you went BR is Feb 2012 - come March 2018 the Bankrupcy will be off your Credit Report which will help.

    Also, make sure your outgoings for any credit cards you have are either nothing or get the balance down as much as possible - Especially as are looking for a 90-95% LTV.

    Any money you owe to people will come off any mortgage value they are prepared to offer as it will be unsecured.

    Its def worth waiting until you know BR is off your Credit Report knowing its only a few months away.

    Good luck with it.
    • tomconfused
    • By tomconfused 6th Dec 17, 12:22 AM
    • 14 Posts
    • 7 Thanks
    tomconfused
    Hello barracuda

    I went bankrupt in 2011 and discharged 2012 in dec so I think it comes off my record this month. However I believe every lender will ask if you have been bankrupt before. I even got asked this when I took at my home insurance.

    Anyway, I applied for a mortgage this May and it was still on my official record. I was buying New so it’s slightly different. I used the housbuilders mortgage broker and to be honest I thought there was no way we would be accepted and we just did it honestly expecting a no. The broker seemed to think I was nuts for worrying about it and said he saw no way we would be refused. Out of his products I think nationwide were the only one that would consider us. However he said after it had gone off the file that would go up to about 8. We put in the application and it got referred as he explained it would. As part of the referral I had to write a short letter explaining my bankruptcy. I did this and we got accepted in full within 5 days of speaking to the broker.

    I never thought we would be all together a mortgage or I would have to pay a hideous interest rate. But I got 1.74% with nationwide so it was the same rate as we would have got without the bankruptcy.

    The difference is I used help to buy and the government put in 20% of the deposit and I put in 6%. So I guess I was less of a risk in that sense. To give you numbers I earn £44k and my girlfriend £41k and we got a mortgage of £260k with the 6% deposit.
    So hopefully it shows you can get a mortgage, I’m still amazed it went through. I
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