Advice re 95% Mortgage and Bankruptcy

Eve1975

I was sweating applying for a mortgage with my partner with a 40% deposit with the Nationwide. Took 9 weeks to get an offer through and even our FA was getting worried!

The underwriters really did delve into my financial affairs but to be expected being a former bankrupt (discharged 2008)

Only thing I would say to anyone trying to get a mortgage as a former bankrupt is to leave it as long as you can. I waited until the 6 years had passed from my bankruptcy date and my credit file looked a lot nicer. Getting the biggest deposit you can helps as well.

droiderm

opinions4u wrote: »

I'm fine with second chances. With strings attached.

But when most other lenders won't touch 95% with a barge pole for even the cleanest of credit histories the loans described on here are extraordinarily generous way to use their savers' deposits.

Are you implying that lenders use savers deposits to fund mortgages ?
Maybe the financial crisis wouldn't have happened if that was the case .

It funny people are having a go at nationwides risk assessment.
I didn't see them needing a tax payer bailout.

It's even more silly to take savings away from them , when all institutions have a government guarantee. Talk about throwing the toys out . .

ACG

GMS wrote: »

99.99% no chance.

Your optimistic!


Sorry OP i dont mean to make a joke of it as i can imagine it being a stressful time and upsetting that you cant buy a property but 95% deals are hard enough to secure for people with no adverse. To have those 2 you have no chance at all. I would say a 15% deposit is what you will need to work towards, you may get away with a 10% but i would be aiming for 15% really.

leveller2911

droiderm wrote: »

Are you implying that lenders use savers deposits to
fund mortgages ?


Maybe the financial crisis wouldn't have happened if that was the case .





It funny people are having a go at nationwides risk assessment.


I didn't see them needing a tax payer bailout.





It's even more silly to take savings away from them , when all institutions
have a government guarantee. Talk about throwing the toys out . .

Just out of interest what rate have you been offered on a 95% mortgage with NW? Is it about 4.9% ?.

opinions4u

droiderm wrote: »

Are you implying that lenders use savers deposits to fund mortgages ?

Pretty much so, yes. 85% of Nationwide's mortgage funding comes from savers.

It funny people are having a go at nationwides risk assessment.
I didn't see them needing a tax payer bailout.

They didn't. But they are currently operating on a wafer thin profit margin of c0.2% which is unsustainably low. Lending at 95% is one thing. Lending at 95% to discharged bankrupts is a completely different game and way beyond high risk.

leveller2911

opinions4u wrote: »

Pretty much so, yes. 85% of Nationwide's mortgage
funding comes from savers.

Is this due to them being a Building Society and can't access wholesale lending in the same way as banks?

They didn't. But they are currently operating on a wafer thin profit margin of
c0.2% which is unsustainably low. Lending at 95% is one thing. Lending at 95%
to discharged bankrupts is a completely different game and way beyond high
risk.

This is the problem I have with them ex bankrupt accessing a mortgage isn't the problem but a 5% deposit doesn't exactly show a history of saving or being prudent. I think 95% lending to ex-bankrupts is pretty shocking ,if indeed its true. I wonder what sort of rate they are getting.

opinions4u

A building society can access wholesale funding, just not to the same extent as a bank.

Nationwide's loan to deposit ratio of 115% is similar to Lloyds Banking Group. I would assume both are heading towards 100%.

leveller2911

opinions4u wrote: »

A building society can access wholesale funding,
just not to the same extent as a bank.





Nationwide's loan to deposit ratio of 115% is similar to Lloyds Banking
Group. I would assume both are heading towards 100%.

So if they are reducing their deposit to loan ratio to around 100% why take on risky lending?.........Or am I reading that wrong?.

opinions4u

leveller2911 wrote: »

So if they are reducing their deposit to loan ratio to around 100% why take on risky lending?.........Or am I reading that wrong?.

That's where I am on this. It's lending they don't need.

Their "Save To Buy" does, I believe, restrict their 95% lending to savers meeting certain criteria. So you do have to be a customer. The mortgage rate charged tends to be higher too. Which makes sense. So it's a scheme I'm broadly supportive of.

But I'm genuinely shocked the lending via this scheme is open to discharged bankrupts.

droiderm

leveller2911 wrote: »

Just out of interest what rate have you been offered on a 95% mortgage with NW? Is it about 4.9% ?.

It's 4.64.
Maybe I am biased but this treating ex bankrupts as criminals does get to me. I am sure nationwide know more about risk assessment than you or I, and I am sure they don't take their decisions lightly.

In my case , you may laugh , but i consider my self low risk.
Between the missus and I, after all bills , we have left in disposable income nearly three times the mortgage payment.

I budget strictly and we managed to save around 17 k in 12 months.
I change my budget spreadsheet every couple of months as prices for various things change. I know exactly how much we spend .

We have one 6 year old car , we have no debt. I have 7 k available on a credit card and a 1 k overdraft which I never use.

I am low risk , and I am so glad nationwide can see past the ex bankrupt badge.
I guess I am less likely to go bankrupt again than a lot of the population is to do it the first time.

Does it really make them so bad?

If clients with clean credit ratings are having trouble getting a 95 percent mortgage , maybe they are being sent to the wrong lenders , or are trying to get too large a mortgage. Maybe they need better advice?