Mortgage 10 years after bankruptcy and as company directors?

psycrow57

Need some advice / info. Also posted on the BF forum as wasn't sure of the best place

I went bankrupt back in 2007. Now I have an excellent credit file with no defaults, no debt etc.

Due to my mum passing away and inheriting a share of her house, which we have just accepted an offer on, we have a reasonable deposit and need to borrow around £100k to buy something else. My husband and I have a limited company, we are directors and now make £11k each a year plus some dividends. His credit is almost flawless except for a mobile phone default just over thereby ears ago - he disputed the charges, it all went awry and now it's freeing is - we found a lender who would take our dividends under consideration but his default meant they automatically refused.

While talking to them, he said I had never been declared bankrupt which obviously is not true - he wasn't trying to be misleading, I think as far as he's concerned it's over and done with, off the register etc. However, I'm assuming that we will have to answer yes to this wuaestion.

Have we got any hope whatsoever? Can anyone recommend a lender or broker? I am freaking out right now as we have five month old twins and potentially nowhere to go when this sale goes through.

sultanabran

Well it depends on the wording of the bankruptcy question. But if it asks have you "ever" been bankrupt, then the answer would be yes. The bankruptcy search by the solicitor would reveal this even if it's gone from credit files so there's no point trying to hide it.

I would imagine your income will be more of an issue than your bankruptcy but a broker would be better placed to inform you.

psycrow57

Thanks - I agree that's our best bet, we are looking into it now.

If we can find a lender who will be okay with the financial history, I don't think the amount will be an issue specifically - those who've quoted us have given us a suggested amount of upwards of what we need, but ideally we need someone who will not refuse us on the basis of that default/ my bankruptcy history and who will also take our dividends into account. Otherwise we are scuppered. It's so frustrating - wehad have more than 50% LTV and the amount we could borrow is only around half of the rent we have to pay. The whole system is crazy. We have no debt, I'm so annoyed about this default situation but there's nothing to be done. I wish he could go back in time and just pay it rather than disputing it, but we can't.

ACG

A 10 year old bankruptcy?!? You should have no major problems, especially not with a £100k deposit.

It would just be affordability that may be the issue but I am sure on £25-30k a year combined there should be options.

sultanabran

I read it as they needed to borrow £100k but they didn't say what size of deposit.

ACG

Ah your right, sorry I was reading it whilst on hold on the phone.

It is a little tight on affordability but probably still achievable.

psycrow57

Sorry, to clarify we will have £125k as a deposit because of the house sale, so it would be less than 50% LTV. It's good to know that the bankruptcy shouldn't be too much of an issue - it's just the fact that they ask if you've ever been bankrupt rather than if you've been bankrupt in the last x years which led me to assume it would be a factor. Seems like my husband's stupid mobile phone bill default will be more of a problem, and of course the fact that our income is part dividends which seems to be a problem.

amnblog

Lots of 'half facts' here.

If you are listed bankrupt at any time it will come up during the application. Your husband is misleading the lender if he states otherwise and it could shoot you in the foot.

With regard to the limited company the profit is as important as the dividends. You don't have to take the profit as a dividend for it to be considered for mortgage affordability.

Your businesss figures will probably have varied over the past three years and this is also a factor.

Having said all that, you will have mortgage options with affordability likely to be the only limiting factor.

Engage a good mortgage broker before you go off in the wrong direction again.

psycrow57

Sorry, I hadn't intended to give half facts - I was just trying to be brief.

Our profits and dividends are basically the same thing. We take all our profits after tax each year. Our annual profits / dividend amounts are pretty consistent too. My husband hadn't intended to be misleading, I think he was just caught off guard by the question and being asked whether I had ever been bankrupt since when I've applied for any credit etc in the past it's usually whether you've had any credit issues in the past six years (although I may be wrong on that since I haven't applied for much!)

I really was just wondering whether the old bankruptcy and the three year old default were likely to be a deal breaker and make it impossible for us - whatever amount we can borrow is what we can borrow and we will work with that, was just panicking we wouldn't be able to borrow anything! We have contacted a broker today so hopefully should have more info soon.

The_Real_Cheddar_Bob

as per my post in your other thread. Seek mortgage advice from a broker, be prepared to pay and avoid the so called "bad debt" mortgage specialists.

Any mortgage advisor who doesnt charge fee's is potentially looking for the best deal for them, then you, i.e the most commission available. Particularly if you feel you may have mortgage acceptance troubles.

You need to be honest on your application. I have a mortgage with Accord Mortgages (yorkshire building society) I've borrowed £118k with a £22K deposit (£140k house value) on a single income, albeit just over the 40% tax bracket.

You may want to consider paying yourselves "properly" for at least the next three months, stomach the NI and tax and put yourselves on a mortgageable remuneration package.

You wont be the only company directors in your situation who want to get a mortgage.

good luck

amnblog

rjwr wrote: »

as per my post in your other thread. Seek mortgage advice from a broker, be prepared to pay and avoid the so called "bad debt" mortgage specialists.

rjwr wrote: »

Any mortgage advisor who doesnt charge fee's is potentially looking for the best deal for them, then you, i.e the most commission available. Particularly if you feel you may have mortgage acceptance troubles.

Where do these ideas come from?