Refused a mortgage due to bankruptcy, help?

Zaychik

Hello, first time I have done this but it has been recommended to me as a good place for advice.

I unfortunatley made myself bankrupt 6 years ago this march gone, I have been discharged from bankruptcy for 4 years also. And this has now come off my credit file which is now clean. Since the bankruptcy my credit file has been perfect with no wrong doings.

Well, with the 6 years to clear my credit record now past and the housing market doing what it has I decided that this was a good time to buy my first house. I researched what was out there and what was available to first time buyers. I finally settled on a government funded scheme called "Ownhome". That went all well and good, followed their instuctions, jumped through all the hoops, then went out and found a property as requested. Got the funding secured from the Ownhome people and got a mortgage approved from the Co-operative bank.

All well so far... well, then i get a letter through the post from the Co-operative telling me that they would no longer be able to offer me a mortgage. I phoned the to ask why and was told that I hadnt been discharged from bankruptcy for long enough to qualify for a mortgage with them! This wouldnt be a problem as I have had mortgages agreed from several major banks before I applied with Ownhome apart from the fact that they require the mortgage to be taken out with the Co-operative bank.

So what i am asking is, if anyone out there has any advice on how i could get the Co-operative to reverse their decision?

Please help, thank you!

Thrugelmir

I suggest you arrange to go in and meet with a manager to discuss the situation.

silvercar

Did they say how much longer you needed? If it is for the sake of a few weeks it may be worth waiting.

Zaychik

they said that if i had been discharged from bankruptcy for 10+ years it would be ok. but that to me seems a little strange and completely out of sequence with the restof the industry, considering it is no longer on my credit history and I have mortgages approved with other major banks.

Thrugelmir

Zaychik wrote: »

they said that if i had been discharged from bankruptcy for 10+ years it would be ok. but that to me seems a little strange and completely out of sequence with the restof the industry, considering it is no longer on my credit history and I have mortgages approved with other major banks.

In the current economic climate the banks will be tightening their lending criteria. They can afford to pick and choose their customers. They no longer have to chase for business.

poppy10_2

Don't waste your time, they won't change their decision, and nor should they.

brit1234

Your applying for a dodgy scheme anyway. if you can't afford a house the normal way then go away and save like everyone else. These schemes are a rip off and designed to keep prices artifically high, be thankfull you got turned down.

Prices have a long way to fall and rents are falling, make the most of it and save a deposit.

uzubairu

Zaychik wrote: »

they said that if i had been discharged from bankruptcy for 10+ years it would be ok. but that to me seems a little strange and completely out of sequence with the restof the industry, considering it is no longer on my credit history and I have mortgages approved with other major banks.

Their criteria is 10+ years which is IMHO reasonable and you don't meet it.
You must realise that the effects of bankruptcy can often be felt long after you are discharged. The banks aren't duty bound to lend you, they have a business to run too.
In the current economic climate you are a risk they are not prepared to take.

So why not wait a few more years, save up some more and improve your credit rating further.
Why do you think you deserve the same deals that non-bankrupts with decent credit histories and deposits are offered?

You could try one of the other major banks you considered, but don't be surprised if you get the same response somewhere down the line.
You are still a risk and your credit history since bankruptcy will probably be limited.

The only 'good time' to buy your first house is when the banks want to lend to you, so you may have to wait a bit longer.