Advice re 95% Mortgage and Bankruptcy

alan_partridge

Dibbers1 wrote: »

Hi, I was wondering if anyone could help!

I was declared bankrupt in April 2008, had my house repossessed and finished paying the official receiver in August 2011.

I have been renting a house for the past 4 years with no arrears, and have managed to build up my credit score through my catalogue account (from an intial £500 credit to £3,400).

I am now in a position to rent another house with the option to buy in 6 months time, however with alot of money going to pay the rent in my current property I have very little savings. I may be able to scrape a 5% deposit together (and given the govts new stance on 95% mortgages), I wondered given my history (not being a 1st time buyer / bankruptcy etc.....) whether I could qualify for a 95% mortgage and what is the best way to go about looking into applying for a mortgage.

I look forward to any advice anyone has!

Many thanks.

try not to put too much stock in the nay-sayers - it seems mortgage advisors are told different to people who go direct, and so can paint an unrealistically negative picture..

as other people have said in this thread, do your own research and you may be pleasantly surprised

see here for my story with a happy ending (bankrupt; got a 95% mortgage with absolutely no conditions attached):

https://forums.moneysavingexpert.com/discussion/4351081

i was in a similar position to you, and was very worried, but was accepted on the spot by halifax prior to that, i got an offer from nationwide as well - and that was just the first 2 people i approached!

try not to worry too much - bear in mind that the vast majority of people who apply for mortgages are blissfully ignorant of the sorts of things that we fret over on forums such as these, and they waltz into high street lenders and get mortgages all the time!

kingstreet

alan_partridge wrote: »

try not to put too much stock in the nay-sayers - it seems mortgage advisors are told different to people who go direct, and so can paint an unrealistically negative picture

There isn't a single broker view in this thread, AP, so that's a bit unfair.

As you know, there's been an issue over the Halifax application system saying bankrupts and IVAs are an automatic decline, but omitting to say "if within six years" and I brought that up on your thread when you bumped it in mid-September.

We have to work on the side of caution and not have people running around having speculative credit searches done if they have no hope with a particular lender. That would do more potential harm.

droiderm

My personal view is it's incredibly difficult. Maybe one lender as it stands for me at this moment in time.

However an interesting question opinions4u brought up in this thread re 95% mortgages.

Feel free to tell me three lenders who offer straight forward 95% mortgage via mortgage brokers.

In fact, name three lenders who offer 95% mortgages on a national basis with no requirement to be an existing customer.

The fact that those restrictions are added in his question, may point to the fact that brokers have a more negative view than punters who have went direct?

Or what maybe I am asking is, maybe customers with an existing relationship, can go direct, have better experiences in these circumstances.
Obviously, a broker can't create that relationship between customer/lender at the point when the customer rings the broker.

Salander

I'm very confused what to do now. I'm 6 years since bankruptcy in late Jan, I was going to chance my arm with a Nationwide Save to Biy mortgage application with the view that if I was declined, by the time Jan comes round it would be much more likely and the damage done by a decline would be more historic. Now, having read this thread & seen the Nat West rates for HtB I'm wondering whether I should either:
A) wait until Jan
apply now with Nationwide
C) apply now with Nat west

???
Thoughts please!!

droiderm

My personal experience is that everything changes in terms of automated credit scoring when the BR falls off your credit file.

You need to make sure your credit file is as clean as a whistle the day after the 6 year anniversary. Even though Nationwide will accept applications 3 years after discharge, you may still fail the automated scoring.

Personally, I would wait until Jan. Have you had the default dates from your BR corrected on your file? That can be a long painful experience, and I suggest you start that asap if you haven't already.

View this as putting yourself in the best position possible. There are absolutely no guarantees.

kingstreet

Other than NewBuy and parent-assist products, there are thirteen 95% lenders on Mortgage Brain today.

Some are direct only, some have geographical restrictions and some are national.

I had a PM from someone this morning and this was my reply;-

We charge £249 on application and receive commission from the lender for our whole market service.

Many 95% products are direct-only, so you would need to check those out for yourself.

The HTB - MG scheme starts this week, with Halifax products being launched on Friday. RBS Group is expected to follow in a week or two, but these are going to be direct only, at the start.

If you let me have your email address, or email me directly, I'll send you a copy of our Initial Disclosure Document and a Data Capture Form to enable me to have a look at what you're going to need. However, I suspect you'll get better by going direct at this time.

Hope that helps,

That's the nature of the 95% market at the moment. Adding the discharged bankrupt thing to that is just blowing my mind. I don't know anyone who would confidently state a lender offering 95% would offer a straight 95% mortgage to a discharged bankrupt.

Let's face it, you were hanging around waiting for a long time for your response and it was a very fraught wait!

Salander

Thanks all, that is helpful. Does anyone know how much damage a decline would cause??

kingstreet

The footprint of a single credit search, visible on your credit file for upto 12 months. Not a major issue, as long as you don't start applying all over the place and have four or five in a short space of time.

The decline itself is not recorded.

droiderm

I am not saying 95% is achievable for anyone, never mind a discharged bankrupt. I think it's just the comments like "Nationwide are insane", "99.9 percent no chance",, "Newbuy that's insane" in this thread from people "in the know" doesn't seem quite to ring true with people's experiences.

I think it's useful people in similar situations to ourselves get the other side of the coin.

My wait, was an awful one. Due to complete on Thursday, and I am still expecting it to go wrong, then they can all say "I told you so!".

BargainMad_3

Just to confirm droiderm, was your mortgage for 75% of the property value under the Help To Buy (Equity loan) scheme for new builds?

And the same question to Alan Partridge. Was your 95% mortgage actually 75% with Halifax and the other 20% an equity loan?