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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 2
  • FraudBuster
    You're SUPPOSED to declare everything, but not everyone does. It seems quite easy to do avoid declaring things as well. Either they are too busy or too dense or simply couldn't care less. Who knows?
    Originally posted by haremscarem

    Be aware that the maximum penalty for lying on your bankruptcy petition is seven years in prison.
    • debtinfo
    • By debtinfo 19th Feb 11, 8:25 PM
    • 6,946 Posts
    • 8,525 Thanks
    debtinfo
    Just wanted to add to the PPI debate, At one time these were rarely chased by the OR, but any payout should go to the OR as if misssold it was always owed back was at the bankruptcy order and so is an asset in the bankruptcy.

    The 3 year rule talked about earlier is a special rule only for family homes not all types of assets, apart from the special rules the general rule is that the assets vest with the OR permanantly.

    I hapen to know that there are currently a test going on where they are using a solicitor to pursue hundreds of these at the same time from old bankruptcy cases after which the intention is to role forward through time to get as much return for the IS as possible

    Obviously at some point they are going to come accross cases which have already paid out, which will be interesting to see what they do
  • esmer
    Great post! Interesting about the amount of mortgage you got. Im only 2yrs Post BR and Im saving to try and get a deposit, but all seems so far out of reach, cant even get a crappy Vanquis card. Im cleaning up my credit file, but its a VERY SLOW process. I looked at my file and a lot of the lenders have the wrong dates. looks like more letters to be sent out. Should go and get my stamps before they go up in price

    Thanks again.
    Saving 2.00 coins
    Grocerys set to 40.00 pw
    Being Thrifty
    • neverletitgetyoudown
    • By neverletitgetyoudown 16th Jun 11, 7:53 PM
    • 211 Posts
    • 97 Thanks
    neverletitgetyoudown
    cheers
  • Tobiwan Kenobi
    Just wanted to add to the PPI debate, At one time these were rarely chased by the OR, but any payout should go to the OR as if misssold it was always owed back was at the bankruptcy order and so is an asset in the bankruptcy.

    The 3 year rule talked about earlier is a special rule only for family homes not all types of assets, apart from the special rules the general rule is that the assets vest with the OR permanantly.

    I hapen to know that there are currently a test going on where they are using a solicitor to pursue hundreds of these at the same time from old bankruptcy cases after which the intention is to role forward through time to get as much return for the IS as possible

    Obviously at some point they are going to come accross cases which have already paid out, which will be interesting to see what they do
    Originally posted by debtinfo
    Not wanting to hijack the thread too much but the PPI thing was what caught my eye in the original post. I recently worked out that I'd probably paid about £6,000 to MBNA for invalid PPI (I was self-employed and had informed them). I went BR just over 2 years ago and MBNA was a creditor, so I have assumed I can't attempt to claim it back. I was also concerned from a moral standpoint...

    Whilst the cash would be handy, can this really be done without any gains going to the OR?
    ďI contend that we are both atheists. I just believe in one fewer god than you do. When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours.Ē
    Stephen Henry Roberts (1901-1971)
  • heleneb
    Hi there,

    In relation to the PPI debate, I am interested in claimimg back some money. I am currently an undischarged bankrupt. my husband isn't bankrupt. Our policy was in joint names. So, Can HE make a claim and keep the payout (as he isn't bankrupt or anything)? Or would my 'half' have to be declared and go to the OR?

    THanks
    • iquit
    • By iquit 17th Jun 11, 12:48 PM
    • 1,818 Posts
    • 2,766 Thanks
    iquit
    TK and heleneb, I suggest you start threads specific to your queries. You may not get many with knowledge on the PPI issue reading a thread about post BR mortgages. HTH
    2016MFW78 £24000/£12000 2017MFW98 £1904.98/£7000 BSC #261
  • Danny026
    Thanks
    Excellent post, it really helps and some great advice!
  • jetr77
    Hi what a great post. I was just about to post a question regarding getting a mortgage after bankruptcy. I am currently bankrupt AD Nov 11. We would love to try and buy our own home after AD as have been renting for 5 years paying out nearley £700 a month. Would like to get back on to the property ladder as an investment for our children in years to come. Any advice would be great.

    Thanks
    • neverletitgetyoudown
    • By neverletitgetyoudown 18th Aug 11, 10:42 PM
    • 211 Posts
    • 97 Thanks
    neverletitgetyoudown
    Hi what a great post. I was just about to post a question regarding getting a mortgage after bankruptcy. I am currently bankrupt AD Nov 11. We would love to try and buy our own home after AD as have been renting for 5 years paying out nearley £700 a month. Would like to get back on to the property ladder as an investment for our children in years to come. Any advice would be great.

    Thanks
    Originally posted by jetr77
    Same Here i got Ed July last year and my Partner is really wanting to look to buy she knows all about my situation she helped me thro it

    any info is good
    • dojoman
    • By dojoman 19th Aug 11, 12:41 PM
    • 11,909 Posts
    • 17,194 Thanks
    dojoman
    B&SC No. 298
    Life`s Tragedy is that we get OLD too soon
    and WISE too late!
  • rocket1971
    Lorax,

    thank you .. and to Ineedaname who linked me to this post.

    I am looking to buying a house after my bankruptcy in 2005. Can I ask did you wife go on the application as well? my wife's credit is clean but she doesn't have a job?

    I have a 20-25% deposit and your story has given me hope to keep trying which I was close to giving up after reading the doom and gloom in other forums and sites.

    once again thank you so much.

    Rocket101
    • joel10873
    • By joel10873 16th Feb 12, 8:34 PM
    • 106 Posts
    • 21 Thanks
    joel10873
    an excellent thread that i wish i had found before i went through a recent mortgage application...that was accepted then thrown out
  • sam3418
    what lender approved your situation so i can try them thanks
  • Musicjazz
    Bump...

    This is so useful... Anybody with any other stories of mortgage success post BR to give us lot some hope?...
  • Jesca
    Hi, thanks so much for this post. I am 6 years post BR now and this will drop off my file in 1 month. I have just been approved for a credit card and my next stop is a store card. Hopefully in a few years, I might be able to get a mortgage.

    I am fervently searching for a BR friendly financial advisor but can't seem to find one! Help!??
  • laurah159
    Definitely need to see more posts like this... Well done!
  • colmac71
    Looking for a mortgage 3 years discharged
    Hi All,
    been a while since I posted, this forum was such a massive help when I was starting my BR in 2008 (discharged April 2009)

    I'm now (with my partner - who has a house/mortgage with approx 20-25% deposit) looking for a mortgage

    I already followed some of the advice from earlier threads in this post

    Leeds BS - want you to wait until 6 years after date of BR

    Yorkshire BS - looking good - will consider after 36 months but need a clean credit file (i.e. defaults post BR) and they also want a 25% deposit

    National Counties will also consider with a 20% deposit (if you are discharged 3 years +)

    I have approached 2 mortgage advisers (sourced from internet) - one got back to me same day (after providing some details) and said that they could get us a 75% mortgage through Nationwide (but when I tried calling Nationwide directly they said I have to be out of BR for the full 6 years) - so wonder if it is sister company? - NB this mortgage adviser wants to charge £1500 fee on completion

    I'm still waiting to hear from other mortgage adviser (very nice but not sure if he is promising the earth and getting nowhere) as initially he said that they are a couple of lenders who might go as far as 90% mortgage but so far he has come back with nothing

    Anyone else with updates / advice would be very welcome, and I'll keep you updated with my journey too.

    Just having a bit of an issue clearing up credit files - some creditors just taking lengthy time (4 months!) and callcredit seem to have my last two addresses mixed up as different information is showing between Callcredit and and the other agencies.

    Best regards
  • Jammababe
    Wow thanks so much for this . It gives us hope should this happen in my situation. I pray not but it is always best to know what is at all possible.
  • Fred Mac
    Building Society consider after a number of years
    Thanks for your list of companies,
    I have spent 2 1/2 years searching for finance to build a house having inherited a house with land post BR. Even with this £140k equity noone wanted to know until now

    I have found that the length of time after discharge after which the companies will consider you varies -
    I have found 2 so far that say 4 years after discharge ( don't even contact them before that date as they won't consider it ) -
    The Principality and
    Nottingham BS
    I have tried to find a list of this criteria for all banks and building societies but no luck so far. Anyone know of one?

    Others won't consider until the 6 years are up and the record is cleared
    Including
    The Yorkshire (Norwich&Peterboro)
    And Northern Rock ( bloody cheeks considering you and I bailed them out of their near bankruptcy)
    the Banks of course have been particularly unhelpful and won't even allow me to open up a business account.


    Make sure your discharge certificate is available and your credit file has been edited.

    Add a Notice of Correction - if appropriate, with ALL the credit scoring agencies as lenders use different ones to check. I managed to increase my score to Excellent and 994 out of a 1000 with Experian. But the BR record has affected me so far.

    Dec 9th this year is my 4 year anniversary which I intend to celebrate with much gusto.
    I will check out your list and report back

    Thanks again
    Fred Mac
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