Remortgage after bankruptcy

Mrwiggy

Hi all. Looking for some impartial advice. I was declared bankrupt in Jan 2015 and discharged a year later. I was helped out by a relative with the deposit on a house in 2008. The deposit was to be paid back by the sale of my original house but the market collapse left me with a house I couldn't sell for enough so said relative suggested just rent it out and sell/remortgage when the market picks up again. Fast forward to 2015 and the bankruptcy ( self employed business owner) kept both houses although the OR wrote to the tenant causing me to loose 6 months rent which was virtually covering the mortgage. Anyway it gets a bit more complicated but basically my relative needs the money back next year. There's enough equity in each house to pay them back but do you think anyone would remortgage me? Alternatively is to sell the rental and pay off the outstanding mortgage/relative. There would just be enough I reckon but it would hurt having gone through all that and have nothing to show for a house I purchased in 1999. I've been working on my credit score and have improved it somewhat but maybe the need to remortgage has come 2 to 3 years too soon. I would appreciate any feedback.

[Deleted User]

Hi,

You're 4 years discharged this month, many lenders work on the discharge date not the date it was registered.

There are lenders that would consider you, 3 years discharged is, realistically, the minimum.

It all depends on the equity in the property (what's it worth and how much you owe). And also which property you want to raise money on. Both at the same time may be a bit more problematic than if you could get the whole lot just out of 1 property.

I assume the 2nd property is either on a BTL mortgage or has a consent to let?

If it's Consent to Let, my understanding is that many lenders won't consider you for additional borrowing etc. (since you're on a residential product, but really should be on a BTL).

I'd get the numbers together for both houses and speak to a broker. Either a local one (unbiased.co.uk can help you find one) or somebody like Trussle (they are fee-free, so it won't cost you anything).

There are other online fee-free ones (L&C & Habito are the two other well know ones) but they won't be much help this close to bankruptcy (certainly not L&C anyway). Other options are specialist 'adverse credit' brokers, but just be very clear what you're paying and when.

There are some on the Mortgages board (https://forums.moneysavingexpert.com/forumdisplay.php?f=15) - it may be worth posting there when you have the numbers together.

sammyjammy

Just sell the rented property, you will have something to show for it, you will have paid off the mortgage and your relative and be free to get on with a more simple life.

RattyIrk

More a follow up question I'm afraid but I am in my bankruptcy year and am joint borrower on a mortgage where the current rate ends this year, albeit after I am hopefully discharged.

Last time our rate ended we just switched to another rate with the same lender. This negated having to go through an application process. They have been written to about my being made bankrupt so are aware.

Does anyone have any experience of this scenario? If we just switched rate without an application process would lender possibly do that?

Basic scenario is property is in my partner's sole name but I went in jointly on the mortgage only as she would not qualify just based on her income. I have never had an interest in the property itself. That is still the position. OR all aware etc, have been open with them about everything.