mortgage post bankruptcy

nolastchance

I went bankrupt in 2015 and lost my house, I am now married and my husband has perfect credit but is a low income earner. Do you know of any mortgage providers that would be useful to us?
thanks

ACG

Once you have been discharged for 3 years, there are 2-3 who may consider you at normal rates - although you not only need to fit criteria, you need to pass the credit check. The likelihood of that will depend on how many creditors appear on your credit report, whether any of those 2-3 lenders were involved in the bankruptcy, the size of the deposit.

There are also another 4-5 lenders who would consider you where rates would be above the high street, anywhere from around 3-6%, but those lenders typically need around 15% minimum.

You could do with speaking to a broker really with experience in adverse credit.

DCFC79

nolastchance wrote: »

I went bankrupt in 2015 and lost my house, I am now married and my husband has perfect credit but is a low income earner. Do you know of any mortgage providers that would be useful to us?
thanks

No 1 can suggest a specific provider.

nolastchance

ACG wrote: »

Once you have been discharged for 3 years, there are 2-3 who may consider you at normal rates - although you not only need to fit criteria, you need to pass the credit check. The likelihood of that will depend on how many creditors appear on your credit report, whether any of those 2-3 lenders were involved in the bankruptcy, the size of the deposit.

There are also another 4-5 lenders who would consider you where rates would be above the high street, anywhere from around 3-6%, but those lenders typically need around 15% minimum.

You could do with speaking to a broker really with experience in adverse credit.

Thank you so much for your answer going into detail was a nice thing to do rather than you just saying No.
thanks again

[Deleted User]

My only worry is "lost my house" - does that mean repossed? Sadly it's a lot harder if you've had a repo, but is still possible.

Are you looking for a "standard" house purchase, or any of the "help" schemes (Help to Buy, Right to Buy, Shared Ownership etc). Standard with 2 applicants I'd say you'd need 10-15% deposit between you. Shared ownership then 10% should be fine if you can get a lender that will do it.

Help to Buy possibly only 5% - seems more widely accepted as lender is at less risk.

From experiance (discharged 3 years) Shared Ownership is a right faff to get - because quite a few of the sub/"near-prime" lenders don't do it (e.g. Magellan) and those that do such as Nationwide will want you to pass a credit score.

Some of the smaller building societies seem a good bet - I'm personally going to be trying Nationwide in a few months (to see if I can scrape through a credit check - free valuation, no app fee, cashback), but if that doesn't work I think a smaller building society (Cambridge Building Society etc) will be next on the list but you have to pay a fee to apply - something I personally think is rather unfair.

ACG

I think you would have more options avoiding the HTB/SO etc - although no harm banging your deposit in a HTB ISA in the meantime.

Somerset - the smaller building societies do not all charge admin fees, but the ones that do, do it because they are not credit scoring you. Someone has to sit there and go through your credit file manually. That needs paying for, it also focuses the mind to ensure you fit criteria as a bare minimum. I do not know if customers can do this, but we are sometimes able to discuss the case and potentially even send over a copy of the credit report to get a quick idea of whether or not it is likely to fit, no guarantees but it helps to limit any potential losses.

They are quite small lenders, it does not take a lot for them to go busy, so I can see why they charge an admin fee.

[Deleted User]

That's a fair point - I do agree with that reasoning in a way, I just don't think it's fair to say "we don't want to lend to you, oh and we'll also keep your £199"!

You could argue it'd be like asking for a say £10 fee for all credit card applications that are referred. Yes it'll stop people "slinging it through" to "see what happens" (as I've done in the past), but I don't think it's fair when criteria is so opaque (e.g. my employer, I thought I reasonably understood the public criteria, then you get in and there's criteria inside the criteria).

I fit this lenders mortgage criteria and meet affordability - but that doesn't mean I'll get the mortgage! (I work in Underwriting). Afterall, they still need to accept the reason behind my adverse (always individual mandate holder discretion) which will be the main stumbling block.

Good idea to discuss the case - I'll see if that's an option, especially as a few of my potentials offer direct sales. Possibly AIP/DIP before paying fee too, but they aren't exactly watertight!

£50 or whatever maybe - but I'm fairly sure I've never seen a decline that's used £200 of an underwriter's time. Their argument will obviously be "Don't like it, don't apply here"!

Back to OP - yep, if there's 2 applicants I'd definitely try to avoid Shared Ownership, it's caused me more issues than it's helped, but is my only realistic choice.

ACG

If the criteria is made public, I can not see them refunding any fees for a declined application. If the criteria is hidden they will (or at least should) I remember this time last year we had a case declined on non published criteria, the lender refused to refund the admin fee.

The broker who worked for me was still relatively new and did not know she could argue it. I was about to refund it myself (it was not the customers fault) but just before I hit submit on sending the customer the money I just seen red mist and called the lender going mad - they backed down...eventually, and refunded the customer. We then placed them elsewhere.

You are probably right, it does not use £200 of their time. There used to be quite a big building society (in 2011ish) who used to charge a £199 admin fee. The firm I worked for used to joke they must make more money from these admin fees than they do lending money because they seemed to decline every case. That does not tend to happen now though.

MrBananas

Get a mortgage advisor. I’m ex-bankrupt who completes on a house purchase in a few days; I thought getting a mortgage would be difficult but I explained my circumstances to an advisor and the advisor was able to phone the underwriter in advance of my application and discuss my situation. Despite being marginal on the criteria my application was approved as a result.

nolastchance

Great help from everyone here. I'm going to hold of until 3 years post discharge and look at my options.
My house was repossessed because I took out a huge re mortgage that I could not pay back. I was given a huge re mortgage solely on the equity that was in the property and not down to how much I earned.

[Deleted User]

Thanks for confirming - best of luck! I'm sure you will have some options, but definitely look for a broker that has experience in adverse (and shouldn't charge you any more than £1,000-£1,500).

The repo will further limit your options - although it can of course be descriped as a link to/consequence of the Bankruptcy, sadly lenders have different criteria. E.g Bankrupt might be discharged 3 or 4 years ago, but Repo might be unacceptable, or acceptable after 6 years etc. A few will consider before but sky high rates (I'm thinking Magellan probably do)

What might be an option is to go with a "sub-prime" lender for the first 2 or 3 years (just to get your foot in the door) - it'll be at higher rates but gets you the house you want etc.

Once your BR drops from credit file (5 years discharged) you should have a few more option. Once it's been a further year (6 years discharged, so 7 since registration) you'll have a lot more options - though will always have to declare it and the repo.