Mortgage after Bankruptcy advice

greatfloyd69

I know this is covered to death here but I'd appreciate any advice for our current situation. My partner declared bankruptcy Jan 2011 after a messy divorce, disolved July 2011. We've been working to rebuild his credit and we're now past 5 years from when he declared. We would desperately love to buy a house but we don't know where to start. He is 46 (47 in August) I'm 34 and we will have a very small deposit. When I read the threads here many people have equity to use, but we dont have anything like that amount. After consolidating a few years ago we have a loan of about £12000 left to clear over the next 2 years, 1 CC with £1000 on and 2 cars on HP (we work shifts and need seperate transport to an office that has no public transport)

We have no other debts, loans, agreements, nothing like that. After initially clering up his credit report from the 3 main companies, where do we go from there? I have the HP and loan in my name, he has the CC. Neither of us have overdrafts facitilies.

We've just moved house for the 3rd time in 6 years (our first 2 homes were sold both after 3 years of us living there, and we had no choice even though we always ask for long term lets) we met our current landlord last week, a very nice guy, but he was honest about the fact he would want to sell in a few years time (after daughter finishes uni in 2-3 years etc etc) so here we are again and it feels so sad as we absolutely love where we are. I'm so sad about it all that it's sharpened my thoughts regarding buying and I want to try and make this possible.

Any advice from anyone in a similiar situation would be appreciated. I feel really defeated at the moment as a 25% deposit seems totally impossible. Has anyone got any advice? I was thinking about booking an appointment with YBS after reading advice on here, but is there any point if we're not doing anything for at least 2 years? I just feel so defeated and I want to do something, anything to be proactive and improve the situation. My next job will be to go over outgoings and try to pinch the pennies.

Thank you

LadyV2508

Hi we are just about to apply for a mortgage after bankruptcy in 2009 so i can pass on some of the advice we have received.

Firstly, from the brokers we have spoken to they all said that after 6 years after the bankruptcy has been discharged, a mortgage is possible with 10% deposit. Its not 6 years from the date of bankruptcy, but 6 years from the date of discharge that seems which seems to be important.

Lenders like to see the deposit gradually building up in your savings account, so if you can do it from your own funds then they will look more favourably on you.

They also like a completely clean credit file from the date of bankruptcy, no no defaults, CCJ's etc after the bankruptcy. They like to see you managing your accounts with no missed payments etc. So check equifax, experian and noddle/call credit to make sure all of the information on there is correct.

In terms of affordability they will look at any existing debts that you have and this will be taken into account. They also look at any available credit that you have and can decline the mortgage if it is deemed as "too much" - i have a credit card with a £3200 limit, zero balance, and my husband has a credit card, £3500 limit and zero balance. No debt at all between us.

If you have an overdraft dont use this in the few months leading up to the application, as lenders can view this as living above your means.

The lenders may ask for 3 months bank statements and payslips - our broker advised us to keep the statements as "clean" as possible in the few months leading up to the application.

But above all my advice would be get a broker who specialises in ex bankrupt mortgages - we spoke to at least 10 different brokers before choosing which one to go with. All of them were excellent and were happy to answer any questions by phone/email. They will all charge a different fee on completion and will advise you of this. Some of them were very expensive - others were no more expensive than a high street bank.

I know that it seems a long way off for you but the time will fly past. We have been saving our deposit for 3 years and i cant believe we are ready for the application process in the next few weeks.

I wish you the very best of luck, hope all goes well for you

greatfloyd69

Thank you so much for your help LadyV2508, I really appreciate the support on this forum.

So with his banckruptcy discharge being July 2011 it will be 6 years July 2017, which is just over a year.... I think in that time I need to be really focused on saving and clearing up debts/credit history. I know we definitely have 2 years in our current house as he was very definite about keeping the property until his daughter finishes Uni in 2 years time, so that takes me to May 2018.

Well it currently feels like a mountain to climb but at least I know a lot more now. Thank you.