Bankruptcy/ mortgage advice needed

fergiewilson

We were discharged from bankruptcy 4yrs ago. We have worked hard at improving our credit rating e.g taken out credit card and phone contracts. We have the opportunity to purchase a house valued at 92k for 73k as a friend owns it. Do you think there is any way in which we could get a mortgage? Looking at how much the mortgage payments could be, it would only be £14 a month more than our rent currently is. Any advice is greatly appreciated as we do not want to miss out on this house.

longtermplanner

How large a deposit do you have saved up?

fergiewilson

5% at present, the offer from the owner was unexpected and the idea was to save another year or so.

bigjl

I would think it is extremely unlikely you will get a mortgage with a 5% deposit so soon after discharge.

I would expect them to require a minimum of 15%.

But the only way to find out for sure would be to apply to see if you can get a decision in principal.

fergiewilson

I thought it would be difficult, but I was hoping the fact the house is valued at £15k more than what we would be buying it for would bring down the LTV and it might look a bit better?

bigjl

You will have issues when trying to get a mortgage on a house that is undervalued.

Mortgage company may wonder why.

They may suspect that something untoward is going on even though there is no such issue.

There may be a solution but you need to speak to a financial advisor.

I am not going to say what you could do, and indeed many have done in the past, as it is frowned upon.

fergiewilson

Many thanks for the replies, fingers crossed we can sort something out.