Advice sought: Bankruptcy Search for Mortgage application

ErictheBlue

Hi All,
I was unfortunate enough to go bankrupt 6.5 years ago and was discharged soon after. I've been very careful since to rebuild my credit file and have no problem getting credit these days, although I borrow only to rebuild my score and keep borrowing to a minimum.

I've unexpectedly seen a house I would like to buy with my partner (who has clean credit history). We have applied for a mortgage in principle with two major lenders, surprisingly one of whom didn't ask the question "have you ever been bankrupt" (the other did and I answered honestly). The one that DID ask wanted more info before making a decision, however the one that DIDN'T ask about BR invited us to make a full mortgage application which we recently did, and we have been accepted. Again there was NO question about former bankruptcy.

I had no concerns about this until now, however after reading some posts in these forums I can see people in a similar position sometimes have issues at the Solicitors bankruptcy search stage, sometime even post-exchange.

I really want to avoid that, but I also think I'd feel foolish if I ruined my own mortgage application to volunteer info they haven't asked. The lender is a major one so I find it hard to believe they have just forgotten to put that question on the forms, it must be a deliberate decision not to ask. I can only assume that because they don't ask that they don't care too much about anything that is more than 6 years old and has dropped off your credit history.

One thing I'm particularly keen to know: Is it correct that the solicitor only searches Land Registry data (which goes back 5 years) and so it may not come up anyway?

I'd be grateful for advice from anyone in the business or in the know about these things.

Kind Regards,
EtB

IF

Hi EtB, bumping your post up the board.

If...x

Musicjazz

Bump...

This post is really interesting...

Were you accepted for mortgage in the end Etb?...

Do let us know how you got on...

I am about to enter BR, and would really like to know what mortgage options there are 6 years post BR...

Any info really useful for myself, and I'm sure many others...

Hope you got your mortgage!:)...

ErictheBlue

Thanks MusicJazz,
Sorry for the delay the whole thing ended up taking a while.

I'm glad to say we did get our mortgage in the end although it was a very close thing and there were some problems.

The lender who didn't even ask the question about Bankruptcy cos I had 6 years completely clean credit turned down our mortgage flat when I volunteered the information 2 months into the process just prior to paying the first money. They said they don't ever deal with bankrupts (contrary to the more recent advice on this board...the lender in question was First Direct) so it would have saved mine, theirs and the sellers time if they'd included that as a question on the web based application (where you can't volunteer any info they don't specifically ask for).

We therefore had to switch at the last minute to another lender who I've banked with for 6 years but had a worse rate (Nationwide). They took a looooong time to decide and went from yes to no and back many times in between, but eventually what swung it was never having missed a payment on anything for 6 years and they could see that.

I would never recommend hiding bankruptcy but as I suspected after a bit of research my 6.5 yr old bankruptcy never turned up in the end on the solicitors search...so in theory I could have kept quiet about it and saved myself some hassle...but I still think that's not really the right thing to do, even in a case like mine where I wasn't hiding it I simply wasn't asked. I volunteered it only because my solicitor warned me that I risked losing my deposit if I failed to declare it (not sure if that's true or not but made me decide to declare it).

Best of luck MusicJazz and anyone else in a similar position with future borrowing of a responsible nature :beer:

Regards,
EtB

Mairiphinc

I heard that Halifax don't ask 'the question' either, but it can come up when the solicitor does a search and they will get notified" I suppose the worst part would be losing out on a house you really wanted because the mortgage company pulled out at the last minute so it probably is best to be up front.

debtinfo

Always best to be as honest as possible, glad it has worked out for you and just goes to show that one of the best things you can do to get a mortgage is to build a reputation with your bank,now you have got the mortgage it should make it easier down the line to get better rates from other banks

fiveyearplan

Glad you got your mortgage in the end.

Very short sighted of First Direct!

SouthCoast

I volunteered it only because my solicitor warned me that I risked losing my deposit if I failed to declare it (not sure if that's true or not but made me decide to declare it).

Posts on the mortgage boards suggest that mortgage offers have been pulled after exchange but before completion of the purchase.