NewBuy 5% for Discharged Bankrupt (or 90% LTV)

kingstreet

OP - I would suggest you read very carefully the broker's fee agreement. If it indicates a fee is payable upfront, the broker will get paid even if you are declined.

If a fee is payable at completion, this gives the broker the incentive to ensure the case is offered and the purchase completes.

financialstress

Hi all,

Thanks for your posts, whilst they are not positive - it's exactly what I expect given mybackground - so I appreciate your expert advice.

The application is with Nationwide, it's with the underwriter - I am fully expecting a decline to be honest as there isn't enough "hurt" money from me I would imagine to give the underwriter comfort in offering credit.

The other NewBuy lender who will accept discharged bankrupts is Aldermore (new to the scheme) but you must be discharged 6 years.

Luckily, the broker I am using doesn't charge a fee (with NewBuy I have to use the recommended broker for the development) - he will get the commission IF the Mortgage goes through.

I have paid £500 to reserve the house... £250 to solicitors (although they claim no sale...no fees) and I've just been asked to pay the valuation fee.

I am comfortable with chucking £1500 at this to see if it works... if not more research required on my part (it's consumed my life since the beginning of Jan to be honest).

My credit score is good (999 with Experian) no defaults, good management of currentlending etc. (which include a couple of credit cards to rebuild creditscoring). Score with Equifax is "good" too.

Another option I looked at was a Mortgage with Skipton, they allow discharged 4 years (not NewBuy) but they use Call Credit system for checking... so i've justfinally got access to this system and the result is NOT good - so lots of work to clean this up.


Dave... as itseems you have dealt with a bit of sub prime -

I am a realist, I realise my background is going to affect me forever (which of course isacceptable) - had I had the foresight of the future maybe I should have considered different options back in 2007!

To obtain amortgage in the future... what will I need to be "attractive" to a lender? Is it really going to have to be 25%deposit?

I'm in asecure job, earning very good money etc. so affordability isn't an issue. I currently pay £1500/month rent and have a high disposable income after allhousehold bills paid.

At some point I will want to obtain a house - but I think I need a true picture of what I am going to need to have to make this happen.

Cheers.

droiderm

When we you discharged? I am assuming the BR is off your credit file now?

I am in a very similar situation to yourself, and have conducted lots of reasearch. Unfortunately the research will only tell you who won't chuck it out instantly, not what LTV they may accept it on.

I see from a previous post that you have only been discharged "nearly 5" years. How come you don't have any defaults? How come BR isn't showing?

You would expect Experian to show some negatives if Call Credit do? Did you include all your previous addresses when you got your Experian report?

Skipton's attitude seem to be it's a referral, apply at your own risk etc etc.

This isn't having a pop, but if you have a high disposable income, keep saving. That's only going to go in your favour the longer it goes on.

One for the mortgage advisors, what's a nationwide DIP worth?

It seems being discharged 6 years will open up more options.

Thrugelmir

financialstress wrote: »

My credit score is good (999 with Experian) no defaults, good management of currentlending etc. (which include a couple of credit cards to rebuild creditscoring). Score with Equifax is "good" too.

Credit agencies scoring has absolutely no bearing on how a lender will score you.

Save your money and don't pay for reports unnecessarily.

The majority of good personal management is commonsense. Just think how you would expect to be treated if you were owed money by a friend.

Dave_Ham

I think there may be a quirk on your credit file, maybe previous addresses.

I too am surprised by the Experian reading, although the fact you are with Nationwide does give you some hope.

Its hard to assess without complete sight of the whole picture, but my initial assessment may be a bit off as I am now giving you some conservative hope.

You are not outside criteria with Nationwide and their DIP is more accurate than others, which bodes well.

I will remain interested how this pans out, would tell broker not to allow Nationwide to instruct valuation until approved and documents reviewed. This is easy enough to do and at least protects the valuation fee.

Just ensure the broker has been as honest as you have, have a look a the application form they can print up online. You may have a great broker, although the developer ones do not have a good rep.

You (& Droiderm for that matter) both appear to have a fair handle on the players that will and will not lend in these situations, although there are others that will consider applications (largely not on new builds though)

Whilst it would be unprofessional (and against MSE rules) to start name dropping which lenders may or may not fit your needs; it would also be commercially stupid for us.

Keep doing what you are doing and by endeavour or by luck in some instances due to the mis-recordings of the credit reference agencies you are likely to get what you want...

All the best

kingstreet

I agree with Dave about the applcation.

The Nationwide question is;-

Have you (or if self employed, your business) ever been bankrupt or insolvent or made any arrangements with creditors?

If a negative answer has been given, the case may well proceed and be offered, but the solicitor's bankruptcy check pre-exchange may bring it to light and the solicitor, also acting for the lender, must report it.

If the question has been answered "yes" then you can rely much more positively on the case proceeding through underwriting.

droiderm

Whilst we are on this subject, I am happy to learn more about it.
I know of one particular building society who quoted Mortgage Indemnity Insurance being an issue with a higher LTV than 75%.

I assume it means they have more difficulty/costs more getting this for ex bankrupts? Is this one of the reasons, in addition to the extra risk, that a low LTV is required?

Thanks

Dave_Ham

A lot of the Building Societies insure everything above 75% and what they were saying is that being ex bankrupt they would not get in insured and hence their attitude to lend 75% LTV and under to ex bankrupts...

droiderm

Thanks again Dave.

kingstreet

Effectively, a third party has control over lending above 75% and the lender has to defer to the views of that third party.

When below 75%, the lender makes the decision alone, based on its lending policy and application information.