Remortgage after bankruptcy

meatym

Hello,
We have a large self cert mortgage that we cant really afford and I have been discharged from my bankruptcy nearly three years, we are stuck on a high rate and wonder if theres any chance of getting a re-mortgage while rates are lower.

Cheers meatym

kingstreet

What's the loan to value?

Is your provable income enough to justify the mortgage (ie 4x?)

Have you got well conducted credit since discharge?

ACG

There are some lenders that would potentially offer you a mortgage. You would need to have build up a decent credit score since your bankruptcy.

meatym

The mortgage is 148000 plus a loan added to it so total is 181000.
our wage combined x 4 = 136000 so not enough and we have no savings for a deposit.
credit after discharge we have had none , mortgage is allways paid and most house bills paid and my bank account never overdrawn,

_Andy_

No lender is going to offer you that kind of salary multiple.

ACG

Im not having a go but i think you need to have a bit of a reality check...
In 3 years of going bankrupt and presumably clearing all of your debts you have since managed to get a £20k+ loan?
Youve done this despite your mortgage being on a high rate and not really affordable?

No lender will touch you, even without the loan you would probably struggle.

Your only real option of making things more affordable is to maybe extend the term on the loan/mortgage - in the long run you will pay more but it would reduce your monthly outgoings.

meatym

acg we havent got a loan after bancruptcy that was there as part of the mortgage allread!!! but thanks

ACG

Ah sorry, i misunderstood.
I think the answer (bar the wrong bit) still remains though, alternatively you could maybe look at downsizing/downgrading your home?

Not an easy decision to make but its better than getting into financial difficulties.

meatym

Hi it's Meaty's wife here...

Our salary x 4 is 156k if taken as gross rather than NET.
Original mortgage was 148k with LTV of 148/210. We took additional lending in 2007 (a year after moving in) of 30k and with interest etc we now owe 183k with value of approx 175k.
We have 19 years left on mortgage, from a 25 yr mortgage.

Gone through everything imaginable financially, and been able to keep our house, but tied into a self cert mortgage which we needed at the time as I was a high earner, though contracting, so this was the only way we could purchase. Now circumstances different, I work part time and earn less than a quarter of what I did before. The line of work I am in has completely changed with earnings low, so taking a part time homeworking job was the sensible option - but has made our options seemingly limited.

Hope the extra info helps.

meatym

Hi thanks for that, I would consider downsizing (can't live in smaller than a 3 bed but there are some cheaper houses in our area with 3 bedrooms - terraces etc) not sure Meaty would though. But how would our lender agree to this when moving would be a new mortgage application? I was only discharged from bankruptcy in 2010 - he in 2009 - so I'm assuming I could not be included in mortgage application?

Interesting option though....

Also how easy is it to extend mortgage term?

ACG

To be honest even downsizing wouldnt help as you wouldnt have a deposit available (im presuming) based on the property being in negative equity. The good thing is that you have a mortgage, this will be helping your credit scores no end.

Extending the term can be quite easy, but it depends on your lender and your circumstances. You can just call them and ask, they will just send out some paperwork for you to complete. But the mortgage usually has to finish before your retirement age so it depends how old you both are and your chosen retirement age as to how long you can extend the mortgage by.
It wont make a huge difference if you extend by just a couple of years, but it might be enough to make life a little more comfortable.