Bankruptcy: Getting a Mortgage

coreybops

Just wondered if someone can give me some advice regarding bankruptcy.

In Feb 2015 I had to declare myself bankrupt, not something I wanted to do but had no choice, this was due to a breakdown of my marriage, me and my ex wife separated in 2014, she stays in our house and I was giving her the money for the mortgage and a loan we had together as they were both from the same bank and the bank said it need to come out of one of their accounts. Stupidly I did this and I later found out she wasn’t making the payments. Anyway, I spoke to step change and due to the amount of debt we were in I was advised to declare myself bankrupt which I did. After the bankruptcy and because my ex wife could not make the payments she handed the house back to the bank. I was discharge in 2016 and I have now moved on and got married again, I am currently renting a property but wish to buy again, me and my new wife have reserved a plot of a new build house that will be ready in 2020, by this time I should be 4 years discharged. I have a squeaky clean credit file now, no debt but obviously the bankruptcy is on there, my question is........I never had my home I shared with my ex wife repossessed she handed it back, I have heard there are some mortgage lenders that will give people like me another chance if they have been made bankrupt but not if their home had been repossessed, I know it’s a while off before I need to apply for my mortgage but I am currently work8ng my backside off to save £9000 for a deposit and want to use the first time buyers help from the government, just a little unsure if it’s worth it if I am not going to be able to get a mortgage because my ex wife handed our previous home back.

Just after some advice or guidance from anyone that may have been in a similar situation.

National_Debtline

Hi coreybops and welcome to the forum


I'd advise you speak to a mortgage broker that specialises in helping people with adverse information on their credit file. There are people on the forum who have successfully obtained a mortgage whilst bankruptcy is still recorded on their credit file but it can be very difficult.


Another point to mention, if you previously jointly owned a property you will not eligible for the government's help to buy scheme as you are not a first time buyer. If your wife has never owned a property before though she could be eligible. Good luck with it all.


Susie
@natdebtline

coreybops

Thanks for the reply,

My understanding is that we are going to be first time buyers again and the website for help to buy under the who is eligible question states

Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.

You wont be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with a Help to Buy: Equity Loan.

I know we cant use the help to buy isa because of previously having a home but the help to buy equity loan where I need 5% deposit just states you cannot have a current home.

Anyone else know if this is correct or not

National_Debtline

Apologies for the confusion, I did think you were referring to the help to buy isa.


Susie
@natdebtline

Hollygoheavily

How long is it on your file for please?

luvchocolate

6 years from your B.R date

ACG

There are lenders who will accept you with 2 years discharged (20% deposit and around 6% rate), 3 years there are more mainstream options available. However, 3 years discharged and a small deposit I think could be a stretch too far.

Also, handing the house back is still a repossession as it still goes through the same process in being taken back by the banks.

coreybops

So does that meaneven after 3-4 yrs discharge I am still going to struggle to get a mortgage. Also is it classed as a repossession against me as i declared myself bankrupt before she handed it back.