Mortgages after bankruptcy

custard_cream_3

My wife and I have a fixed rate mortgage until 2012 and we should be able to keep the house when I go BR because it's got very little equity in it (unless the bank decide to withdraw the interest only deal we're currently on).

What would happen though in 2012? I understand I might find it very hard to remortgage with anyone else, but would our current provider simply put us on their standard variable rate, or would we stand a chance of another fixed rate if we've kept all payments up?

I know it's a few years off, but it's all part of deciding precisely what to do now in terms of the house.

Thanks again.

tigerfeet2006

Well you are fairly lucky that bit will be another 3 years after your discharge that you will have to deal with it. The further away your BR is the more likely you are to get a good deal. Obviously no one can say for sure what will happen as we don't know what the market will be like. The worst that can happen is you are offered a rate that is 1-2% above average. But you may be able to shop around for a better rate. Interest rates may have gone up to 15% by then like it was in the 80's or they could have gone back down to 4%. Unfortunatly noone has a crystal ball. I'd make a fortune if I did though

positivestep_2

Custard cream - It may be difficult for you to remortgage unless you have equity (ideally minimum of 25%) in your property once bankrupt. I rang my mortgage lender anonymously before I went bankrupt and asked them what would happen to my mortgage rate if I went bankrupt...they said they would offer me whatever fixed rate was available at the time. It may be worth ringing your lender as well and asking (or get someone else to ring for you).

custard_cream_3

Thanks you two.

House prices are a funny thing, and I think I could get it to work in my favour because the prices quoted by estate agents when valuing are what they think you could get in a market where no-one is buying, so hopefully, when the market starts to pick up again, prices might climb back quite quickly giving us some equity again.

Hopefully with my wife being a school teacher, it will help too, but you're right, it's a long way off, and the worst case scenario would be to stick with the bank's standard variable rate...or sell and hopefully have some money out of it.