First time buyer, (post bankrupt) please help!

macs1981

I would appreciate anyones help because i am at my wits end with all the different mortgage advice i have received from various advisors.

Here is my background,

Im nearly 31 and im a self employed bricklayer, i earn between 25 and 30k a year.

I was foolish when i was younger and got myself in a horrendous amount of trouble with credit cards and loans. I thought it was all under control, until i realised that my wages werent covering the amount that was leaving my account in repayments. I didnt know where to turn as i didnt want to let my mum down and burden her with any worry so i turned to a man i met who worked for the insolvency beareu, we worked out that my debts were around £30000 and the only way out was bankruptcy, i acted on this advice and told nobody as i was also told that in three years life would return to normal, (I was not able to get a mobile phone contract until 2011). I was declared bankrupt in 2004 and was discharged in 2005.

My credit rating and score is now 980 which is good according to experian.

Now im trying to get a mortgage with my partner who earns £19000 a year and we have a £10k deposit but could get more, i have some mortgage advisors saying it is impossible for me to get a mortgage at all, i have some that say i could but the amount i went bankrupt for is huge and no lender would consider me and i have some that say maybe yes maybe no.

I was wondering if there is anybody that uses this board that have maybe been in this or know someone that has been in a similar situation that could give me more definitive advice?

It would be a huge, huge help.

Thank you for taking the time to read this.

GMS

Have a chat with a broker.

Some lenders would consider but it would be down to credit scoring.

How much are you looking to borrow? The more deposit the better as a general rule.

Your bankruptcy should be off your credit files now but would still need to be declared if asked.

Get copies of your credit reports from Experian, Equifax and Call Credit and pass to a broker.

testoni

Macs1981,

I'm in a similar situation now, and have been given an Agreement in Principle by Halifax for the Bovis Jumpstart Scheme.

Similarities:
Bankruptcy Jan 2006
£10k deposit

The differences are:

Wife and I combined salary is around £61k
Both are employed PAYE
My wife has some CC and loans
You have a better credit rating.

We used an IFA the Developer nominated who is, so far, brilliant.

Applying for the formal offer now, but our IFA is confident, so hopefully it'll all work out.

I'd say go for it, what have you got to lose, worst case you get a reason behind a rejection which you can build on.

Just be totally up front and honest about every minute detail, even if it seems unimportant to you.

Conrad

One possible way forward is in your partners name only.
Be careful, anyone other than a very experienced broker, will mess this up and ruin your chances.

Regardless of whether the bankcruptcy notice no longer appears on your credit files, be aware the Solicitor (acting for you AND THE LENDER) will carry out thier own bankcrupcty searches.

Senior_Paper_Monitor

Of the top of my head there are three mainstream lendes who will 'consider this' but in all cases 90% LTV will be difficult - the lower the LTV the better the chance (although we got one through last year at 90% in similar circumstances except twice the bankruptcy amount you refer to).

Self employment will not assist the case - your documents and earning trends/stability will be important in the consideration.

You will need to be able to demonstrate immaculate behaviour in recent years and proper saving habits - gifted deposits will be a problem.

Would echo Conrad's comment about using a broker - and one that you feel comfortable with and can demonstrate experience of this sort of case.

macs1981

Thanks for your replies, helpful so far.

Testoni - If you dont mind me asking,how much was your bankruptcy for? This is very similar to wahts we are looking at in terms of the Bovis deal, we are hoping to do the FirstBuy government scheme with a 10% deposit on a £167k mortgage. The IFA on that deal seemed very helpful and said that the Halifax would accept us with my bankruptcy 'in principle'. However, she never asked how much my bankruptcy was for. I met another IFA last week who did ask how much my bankruptcy was for and said that this would be a massive problem?

Conrad - The IFA we met last week also suggested my partner going on her own but the problem with this is that all we can afford is £80k and unfortunately in Devon there is nothing suitable availible for this amount. Unless we do the shared ownership 50% share scheme, but ideally we would love to be able to avoid this and buy our own property on a mortgage with a higher interest rate if need be.

Also, for someone in the position im in do you think it would be worth going to my bank (first direct) who i have banked with since bankruptcy and ask them if they would be able to offer me anything. Do you get any leniancy if you have banked with the lender with no problems for the last 8 years?

Thanks again for your help.

macs1981

Senior_Paper_Monitor wrote: »

Of the top of my head there are three mainstream lendes who will 'consider this' but in all cases 90% LTV will be difficult - the lower the LTV the better the chance (although we got one through last year at 90% in similar circumstances except twice the bankruptcy amount you refer to).

SElf employment will not assist the case - your documents and earning ternds/stability will be important in the consideration.

You will need to be able to demonstrate immaculate behaviour in recent years and proper saving habits - gifted deposits will be a problem.

Would echo Conrad's comment about using a broker - and one that you feel comfortable with and can demonstrate experience of this sort of case.

Thanks for this, just to clarify, you got one through at twice the bankruptcy amount? Does this mean you got one through at £60k or £15k?

As for saving, we have saved about £600 each per month for the last 8 months and my current account fluctuates between £500 and £2000, not been in my overdraft for the last 3 years.

Been Self employed for about 6 years and ive got the last 3 years accounts for all to see.

Why would 'gift' deposits be a problem? Just out of interest?

macs1981

Does a IFA need to be local or can it all be done over the phone? If any professionals on here are, or know of any IFA's with experience in cases like this i would be more than happy to talk with them and hopefully persue our case.

Senior_Paper_Monitor

The 90% LTV case we put through middle of last year was for £57K bankruptcy entered Jul 04 and discharged Jun 05 - all done remotely (until afterwards when he called in for a coffee).

The lender we used was insistant that we demonstrated deposit from savings rather than gifted -thereby proving, or at least demonstrating, the client's improved management of money and long term commitment.

As Conrad states you need to use an adviser who will 'stage manage' (I am am not infering anything other than full declaration by that cliche) this sort of application all the way through, the slightest slip can mean the lender taking the easy route and saying no.

testoni

Hi Macs,

BO was £24k, but I was never asked by the IFA.

We are putting a 5% deposit on £175k with 15% Bovis equity loan (we earn too much for Firstbuy) therefore 80% LTV.

Our affordability puts us in the £203k bracket, but we are only asking for £140k.

Our IFA has never thought the BO would be an issue.

I'm still sceptical that we'll actually get a formal offer, but that's probably because the last 6 years has been a major uphill struggle.

macs1981

Senior_Paper_Monitor wrote: »

The 90% LTV case we put through middle of last year was for £57K bankruptcy entered Jul 04 and discharged Jun 05 - all done remotely (until afterwards when he called in for a coffee).

The lender we used was insistantt that we demonstrated deposit from savings rather than gifted -thereby proving, or at least demonstrating, the client's improved management of money and long term coommitment.

As Conrad states you need to use an adviser who will 'stage manage' (I am am not infering anything other than full declaration by that cliche) this sort of application all the way through, the slightest slip can mean the lender taking the easy route and saying no.

Well the deposit could be achieved with some more saving, so dont see that as a problem although anything more than 10% without it being a gift could be an obstacle.

All the mortgage advice we have recieved so far has been free of charge. As my case is much more complicated and obviously requires more work, do you think that the majority of free IFA's will dismiss my case as they deem it too much work for little reward?

In a nutshell, would you suggest i find an IFA with experience and pay him to do the work? If this is the case how do i go about finding a brilliant IFA and know that they are suitable for my case?