Has anyone / Can you got a mortgage after BR?

Izabel

Hi

Both my partner and I went BR last year and have been discharged since the beginning of the year. I'm in the prossess of cleaning up our credit files and would like to know -

Has anyone successfully bought a house after BR?

We are renting at the moment and with baby number 3 on the way have started thinking about being more secure and owning our own home again, is it too soon?

Thanks for all advice.

Izabel

Any advice at all would help

philnicandamy

After discharge years 1 - 3 - There are currently two lenders, both of whom require a deposit of 50% or more, and both will charge in excess of 10%.

After discharge years 3 -6 - A number of lender will consider and application, but that doesn't mean acceptance. Minimum deposit 25%, interest rates the same as they offer to the market at large.

After discharge years 6 and over - Quite a number of lenders will consider with a minimum deposit currently of 15%, and interest rates the same as for non-discharged bankrupts.
Even with a perfect history, a deposit of 15% is still going to result in an interest rate of 5% or 6% or more

So_Sad_Angel

Congratulations on baby number 3....hope all is going well.

In terms of lending criteria on bankrupts....it changes all the time. The rule of thumb is the greater the deposit ( thus the lower the LTV / loan-to-value ratio) the more tempting the proposition is to the lender. I was a Mortgage Advisor for many years & have done mortgages to discharged BR`s (high st lender too) however the LTV was typically 65% or less.

In the early years as Phil says the rates will be extortionate & the terms will be harsh (ie fees/tie-ins/redemption penalties etc).....quite frankly you might be better using that time to build up a deposit.

Hope that helps,

Angiexx

xocbc

I'm in the same boat.

It's ironic really. Before going BR they couldn't throw enough money at me. Now, after BR, with a new job paying 3x more than I used to earn, with 0 debt, I'm stuck paying rent.

Maybe the one good thing to come out of the credit crunch and new FSA regulations will be less people getting £000's that they can never afford to pay back and avoid this mess.

Izabel

Thank you, didn't realise how much deposit you'd need to put down! Will have to re-think and start saving more!

philnicandamy

Sadly.....i'm afraid so

oneandonlyboy

I was dischanged two years ago and was looking at taking out a mortgage with a 20% deposit i thought i might be ok, nope!! 50 % or more before they will even look at me.

So back to saving for a few more years.

out_of_cash

this will be another case of the lenders taking a bashing as all ex brs will be carrying or should be carring zero debt i look at it this way its their loss i plan on buying again in the future but will be 68 when that happens currently 48,as i will pay cash or just keep on renting.

good luck to you and yours