Remortgaging after bankruptcy.....

mickeylucie

Hi

I am looking to go BR very shortly and I am hoping to keep my house which is mortgaged. However if I am successful in keeping it, my mortgage is up for renewal in Jan 2010 and my main concern is how difficult it will be to remortgage as a bankrupt?

Just wanted to know if anyone has managed to do it, are the interest rates offered ridiculous or has it been ok?

I dont want to fight for my home, if a few months later I cant remortgage on resonable rates.

Thanks

Queen

Hi Mickeylucie,

You won't need to remortgage stay with your current lender bur have a new product they won't do any credit checks for this so you should be able to have a decent rate depending on loan to value of property, that's what we will do product finished in Sept with A&L on BBR + 0.99% but will take a new product when rate starts to go up

marc3

Can you clarify please queenie .
I am in similar situation to Mickie and Lucie;and just discharged

Managed to keep property as got neg equity, but my thoughts are that i have no hope of getting a new mortgage deal when existing deal also runs out in january 2010;and that i won't get a new deal for at least 5 years.

I'm thinking in January my existing lender will simply switch me a their standard variable rate ; but they will be 'happy' to carry on with the mortgage without any other questions,but my mortgage costs will go up substantiallly from jan.

Just about manageable, but i reckon interest rates will start to go up from 2010; and so i'll be on the svr rate for the next 5-6 years which could be painfull.

Any other thoughts

Queen

Hi marc3, I contacted A&L before BR to see what would happen and they advised that we could have a new product when the old one finished no credit checks or confirmation of income required

Tinytim

It will depend on the lender as to what may happen. Currently, there are very few lenders who will consider a discharged BR for at least three years, and only then with sufficient equity. If there is sufficient equity you would almost certainly lose the house in BR. Therefore, if you do keep the house, remortgaging would almost certainly be out of the question.

Some lenders such as A&L can be very sympathetic and recognise that continued payments are preferable to the costs and hassle of repo, especially if there is negative equity. However, under the terms and conditions of many lenders, if you declare BR they have the right to firstly cancel any preferential rate you may be benefitting from, and secondly demand full repayment immediately. Again, pragmatism may prevail, but not necessarily so.

The credit check is not really applicable, as I understand the OR will inform any secured lenders of the bankruptcy as a matter of course.

Queen

Hi my product finished in Aug 08 and currently on BBR + 0.99% as anyone else had there mortgage rate increased or withdrawn due to going BR

fiveyearplan

No, mine wasn't increased or withdrawn - it did increase though when my product expired November 2008. As far as I'm aware the lender has not been informed of my BR and I really don't think they can demand full repayment - it is a secured loan and nothing to do with bankruptcy.

Queen

Hi just checked with my OR he advised A&L when we first went BR they have not contacted me so obviously not going to increase rate due to BR or they would have done this by now. I think it would be mad if any lender were to increase due to BR giving the current climate.

Tinytim

fiveyearplan wrote: »

No, mine wasn't increased or withdrawn - it did increase though when my product expired November 2008. As far as I'm aware the lender has not been informed of my BR and I really don't think they can demand full repayment - it is a secured loan and nothing to do with bankruptcy.

It will depend on the terms and conditions. My mortgage is with a member of the HBOS group, and it is definitely there in black and white. My understanding is that the mortgage lender has to be told by the OR as the beneficial interest then vests in him, regardless of whether this has any actual value.

I am hoping that in my case pragmatism will rule, and they would prefer to stick with a customer who hasn't ever missed a mortgage payment in the hope that continuing to maintain the status quo is preferable to selling for less that the outstanding balance in the knowledge that the shortfall would be included in the BR

sieve

Queen wrote: »

Hi just checked with my OR he advised A&L when we first went BR they have not contacted me so obviously not going to increase rate due to BR or they would have done this by now. I think it would be mad if any lender were to increase due to BR giving the current climate.

They can't if you are up to date I don't think, as it will be fixed during any fixed period and then revert to the SVR that is on your mortgage offer so changing that will mean changing everyone.

Queen

Hi I will check with A&L, we are purchasing the BI from the OR as property is in negative equity