Mortgage after Bankruptcy - hope after the crash
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gottheTshirt
Posts: 1 Newbie
Hi all.
First post here, but I've read threads on this forum over the past 18months and I promised myself I'd write a post if I ever had good news to share which hopefully might give someone else hope. Long story of course...
Some years ago, due to massive losses as a result of the economic crisis and our family circumstances, my partner (main wager-earner) had no option but to go bankrupt and our home was repossessed.
We made some very clear cut choices, rent and live very simply. Work our assess off. No credit. Focus on our family. Wait. Maybe never get another house of our own, but at least we were okay. Hard times though. We paid our bills on time, never missed anything. No overdraft.
My partner was discharged after a year of bankruptcy and after another couple of years we both got a credit card each from a company specialising in these things. We used them responsibly. In time our combined income began to grow.
Six years(+) post-bankruptcy (but five years post-discharge) we spoke to a mortgage broker, and told him everything. He advised us to go with the Halifax as they will consider people who have previously been bankrupt. They ask about repossessions in their credit history question, and we answered ALL their questions completely honestly.
We got a decision in principle (I was still in shock at this point), and so we knew what we could afford to look at. And we started looking.
To cut an incredibly long story short, we found the house we wanted to buy. A brief panic over something incorrect on a credit file led to more sleepless nights, but we got it fixed. The full application went in via our broker, and it was accepted.
Having been through the trauma of bankruptcy and reposession, I simply could not believe it would ever work out although somehow my partner kept the faith. We had to hide the whole situation from our children so as not to get their hopes up. It was all very hard. This forum helped a lot, but people so rarely give you a proper update after the event! So here is ours.
After our mortgage offer was put in writing we were still very aware that it wasn't set in stone as lenders can withdraw their offers, however they can only do this in very specific circumstances. We exchanged contracts subject to mortgage. We were still very nervous at this time, despite having an offer in writing. However a bit of research did seem to suggest that EVEN IF the lender had somehow missed my partner's past bankruptcy/ financial history despite their various searches and they then saw it on the searches, they would probably be on shaky ground. This is thanks to the EU Credit Directive. I was unable to track down where the UK has implemented it into law though as it appears to be spread across a number of different acts - very confusing!
As far as I can tell the protection offered by this Directive would not apply if we had lied on our application - so our advice would be never lie on forms! And of course we're about to leave the EU...
I told you it was a long story...
Anyway, the news is, that despite the many obstacles we have done it and we have bought our 'forever' home (as in, we'll be 'forever' doing it up!) and are moving in a couple of weeks.
The road has been very long and hugely stressful and doubtless there will be more stresses ahead. However, the purpose of this post is to share our story and make the following suggestions to anyone who finds themselves in the same horrible situation we did. These suggestions won't come as a surprise to any of the brokers on here!
1/ play the long game, try to live within your means. You will need to apply for credit at some point (in order to grow your credit file), but try to keep it very manageable and pay it off whenever you can. At some point those credit companies will start offering you lots of money. Ignore them! Keep it small.
2/ Keep your books and work hard.
3/ Hire a broker and be honest with them. Even if things were really bad, their job is to help and they may have heard the same story more often than you think...
4/ Try to remember that a bad credit history does NOT equal a bad person
It can feel like it sometimes. All you can do is go from now and do your best. Bad things happen to good people. Look after your health.
And that's it. I hope this helps someone!
GOOD LUCK!
First post here, but I've read threads on this forum over the past 18months and I promised myself I'd write a post if I ever had good news to share which hopefully might give someone else hope. Long story of course...
Some years ago, due to massive losses as a result of the economic crisis and our family circumstances, my partner (main wager-earner) had no option but to go bankrupt and our home was repossessed.
We made some very clear cut choices, rent and live very simply. Work our assess off. No credit. Focus on our family. Wait. Maybe never get another house of our own, but at least we were okay. Hard times though. We paid our bills on time, never missed anything. No overdraft.
My partner was discharged after a year of bankruptcy and after another couple of years we both got a credit card each from a company specialising in these things. We used them responsibly. In time our combined income began to grow.
Six years(+) post-bankruptcy (but five years post-discharge) we spoke to a mortgage broker, and told him everything. He advised us to go with the Halifax as they will consider people who have previously been bankrupt. They ask about repossessions in their credit history question, and we answered ALL their questions completely honestly.
We got a decision in principle (I was still in shock at this point), and so we knew what we could afford to look at. And we started looking.
To cut an incredibly long story short, we found the house we wanted to buy. A brief panic over something incorrect on a credit file led to more sleepless nights, but we got it fixed. The full application went in via our broker, and it was accepted.
Having been through the trauma of bankruptcy and reposession, I simply could not believe it would ever work out although somehow my partner kept the faith. We had to hide the whole situation from our children so as not to get their hopes up. It was all very hard. This forum helped a lot, but people so rarely give you a proper update after the event! So here is ours.
After our mortgage offer was put in writing we were still very aware that it wasn't set in stone as lenders can withdraw their offers, however they can only do this in very specific circumstances. We exchanged contracts subject to mortgage. We were still very nervous at this time, despite having an offer in writing. However a bit of research did seem to suggest that EVEN IF the lender had somehow missed my partner's past bankruptcy/ financial history despite their various searches and they then saw it on the searches, they would probably be on shaky ground. This is thanks to the EU Credit Directive. I was unable to track down where the UK has implemented it into law though as it appears to be spread across a number of different acts - very confusing!
As far as I can tell the protection offered by this Directive would not apply if we had lied on our application - so our advice would be never lie on forms! And of course we're about to leave the EU...
I told you it was a long story...
Anyway, the news is, that despite the many obstacles we have done it and we have bought our 'forever' home (as in, we'll be 'forever' doing it up!) and are moving in a couple of weeks.
The road has been very long and hugely stressful and doubtless there will be more stresses ahead. However, the purpose of this post is to share our story and make the following suggestions to anyone who finds themselves in the same horrible situation we did. These suggestions won't come as a surprise to any of the brokers on here!
1/ play the long game, try to live within your means. You will need to apply for credit at some point (in order to grow your credit file), but try to keep it very manageable and pay it off whenever you can. At some point those credit companies will start offering you lots of money. Ignore them! Keep it small.
2/ Keep your books and work hard.
3/ Hire a broker and be honest with them. Even if things were really bad, their job is to help and they may have heard the same story more often than you think...
4/ Try to remember that a bad credit history does NOT equal a bad person
It can feel like it sometimes. All you can do is go from now and do your best. Bad things happen to good people. Look after your health.And that's it. I hope this helps someone!
GOOD LUCK!
0
Comments
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congratulations that's great news and gives us all hope x0
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Amazing, congratulations OP!
Me and my brothers just got our very first house/mortgage together, and are expecting the key's tomorrow, the solicitor has received the funds today from the lender To be honest we did not expect to be buying any time soon, but after a few hiccups, and a mindset to get a mortgage sorted no matter what we also got there in the end.
Our case wasn't as completed as yours, but it still feels like a major achievement, so can only imagine how good you must be feeling right now! Congrats again.0 -
Congratulations on your new home. Your story sounds so similar to ours so it’s great to hear that getting a mortgage can be a possibility. We are 4 years post discharge and working hard to save. Do you mind me asking what percentage mortgage you were able to get.0
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Congratulations!!
Halifax are well known for being the most forgiving on the high street, when others (TSB & Santander) won't even consider it if you've ever been bankrupt!
I've personally tried for an AIP with them at 4 years discharged in the hope they may be flexible (main account is with them and they've given me a ridiculous overdraft, so thought it was worth a shot!) and it got kicked straight out, presumably as bankruptcy is still on my file.
I want to buy before next year so I'll probably go on to some expensive 2 year fixed rate somewhere else, but it is good to hear good news stories!
The inability of lenders to withdraw offers is a godsend for people with a shaky history. In the past there were stories of lenders withdrawing offers just because their criteria or prices had changed - basically they didn't fancy it anymore!
As you say, as long as the customer has been honest, that can't happen these days!0 -
There are 2 high street lenders who will consider applications once discharged for 3 years and another after 4 years.Somerset_La_La_La wrote: »Halifax are well known for being the most forgiving on the high street
We did a case 3 months ago where Mr and Mrs had been in an IVA and then declared bankrupt in the last 6 years, 10% deposit and a rate below 3% fixed.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Jumping on as we nervously await our first AIP, 5 years after my bankruptcy and 4 years after discharge.
Our broker is going with Nationwide BS, but I'm extra nervous as thats who my repo was through in 2014
Can anyone tell me what other lender might consider us within these timescales?
TIA0 -
Im having no such luck with any lenders even with a 90k deposit. I have had about 6 AIP but they fail at the under writer due to having a repo and BR. Im 6 years next march so not long to wait and i hope things will be easy from there on0
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cancatsdance wrote: »Im having no such luck with any lenders even with a 90k deposit. I have had about 6 AIP but they fail at the under writer due to having a repo and BR. Im 6 years next march so not long to wait and i hope things will be easy from there on
Have you cleaned up your credit file?
Have you checked CIFAS for any records for fraud (not saying you committed fraud - just checking all angles) A large deposit and 6 yrs post BR you should be able to get a mortgage - something is spooking the lenders...0 -
from what im told its just the repo and BR not being 6 years as yet so im happy to wait just a pain when your wasting yet more money renting0
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Waiting is fine - but if there are incorrect details on your credit history 'waiting' won't help. Some companies have been known to keep marking defaults ad-infinitum so the 6 year point never actually comes. That's why cleaning up the credit file is so important.
But if you've done all that then yes - just sit it out until spring.0
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