Discharged 10 years ago - looking for mortgage

khanji17

Hi,
My husband & I went Bankrupt in 2010 and were discharged less than a year later. 
We were at the time living in a mortgaged house and are still there. We are planning to move and get another mortgage this year or next year. We don't have any loans or credit and have good credit scores (no debts, lots of unused credit cards in our names). 
My question is, will we struggle when applying for mortgage with the lenders? Will our bankruptcy affect our chances of getting most competitive rates? When assessing the eligibility, how far back do the lenders look to check our credit history?
Any advise will be greatly appreciated.

MalMonroe

Hi. If you haven't looked at your credit report, I'd advise doing that now. There are a few free ones you can look at, Clearscore is quite good, or there's Karma and Totally Money. Then you'll see that your bankruptcy isn't recorded because bankruptcies are removed from your credit report after 6 years and lenders can't see any further back than that. All bankruptcies are discharged after 12 months so I'm not sure how yours was discharged LESS than a year later. If you're still paying a mortgage, and have been doing for a while without any problems, then I can't see that you'd have any trouble getting another one. But like I said, have a look at your credit report, it doesn't cost anything and it's always a good idea to check it because sometimes mistakes have been made and you need to get them put right. 

Fighter1986

There are a few lenders who won't touch you if you've ever been bankrupt but a great deal of them won't mind as long as you've been discharged for 3+ years. 

You'll be asked if you've ever been bankrupt while applying, don't be tempted to lie even though the bankruptcy doesn't appear on your credit files any more - it still appears in the publicly searchable London Gazette.

You may wish to use a reputable all of market broker like London & Country to source a suitable lender however Nationwide's current lending criteria regarding bankruptcies is "Discharged 3+ years".

[Deleted User]

Over 6 years discharged (7 since registration), you'll have very few issues, assuming the rest of your credit file is perfect. As you're at/approaching 10 years, that adds some weight.

Pre-covid rules, but I can't see criteria changing that dramatically. Fact you've paid your existing mortgage throughout will help too.

As above, some (e.g. Santander, Virgin Money) will never touch you (based on the lending criteria they've had for the last few years - it does evolve over time so they may change their stance eventually, but not in the short term). Others such as Nationwide and also a large number of Building Societies are happy to consider after 3 years discharged or 4 years discharged.

With such a long time passed, assuming your credit file is perfect, I doubt you'd have any abnormal restrictions applied either (e.g. max loan to income multiples can be reduced for risky cases, or max LTV reduced) - you're essentially classed as "prime" now (apart from those few lenders, so I'd look at a broker to do the leg work for you - also helps with arguing your case if you do get questioned).

I'd personally want to make sure it's declared too - even if the application only asks for last 6 years or similar (e.g. Halifax). Don't declare it on the application (as that might cause it to be wrongly auto-declined), but I'd be wanting to declare (or get your broker to declare, if you are using one) and get it in writing across to the Underwriter at DIP / before the full case is submitted. As Solicitor is likely to inform the lender after offer. Although it shouldn't be an issue if you're with the right lender - if they ask any questions or perform checks, you'd rather that was all done upfront.

WickedWitch123

MalMonroe said:

Hi. If you haven't looked at your credit report, I'd advise doing that now. There are a few free ones you can look at, Clearscore is quite good, or there's Karma and Totally Money. Then you'll see that your bankruptcy isn't recorded because bankruptcies are removed from your credit report after 6 years and lenders can't see any further back than that. All bankruptcies are discharged after 12 months so I'm not sure how yours was discharged LESS than a year later. If you're still paying a mortgage, and have been doing for a while without any problems, then I can't see that you'd have any trouble getting another one. But like I said, have a look at your credit report, it doesn't cost anything and it's always a good idea to check it because sometimes mistakes have been made and you need to get them put right. 

Actually years ago you could be discharged from bankruptcy within the year so i guess that's what happened.  When i declared bankruptcy 6 years ago you still had to go to court so rules do change over time.

khanji17

I was discharged about 7 to 8 months later as far as I remember, but definitely less than a year.

Fighter1986

MalMonroe said:

bankruptcies are removed from your credit report after 6 years and lenders can't see any further back than that

Bankruptcies remain in the Publicly Searchable London Gazette ad infinitum. Lenders can see a history of Bankruptcy even after 25 years. After 250 years. 

lastordersplease

I was discharged within the year in 2009, I think the reason was Insolvency Service accepted that a lot of it was not the individuals doing, but the banks were culpable to a large extent. I now have a very good credit score, but every time I apply for a Barclaycard I get refused, even though keep offering them to me. I think the 6 year statute barred rule is a myth.  

khanji17

I do have a Barclaycard since 2016/17, was never refused one. But never had that before bankruptcy? Maybe its a good idea to see if you have any discrepancies on your credit file?

lastordersplease said:

I was discharged within the year in 2009, I think the reason was Insolvency Service accepted that a lot of it was not the individuals doing, but the banks were culpable to a large extent. I now have a very good credit score, but every time I apply for a Barclaycard I get refused, even though keep offering them to me. I think the 6 year statute barred rule is a myth.  

Fighter1986

lastordersplease said:

I was discharged within the year in 2009, I think the reason was Insolvency Service accepted that a lot of it was not the individuals doing, but the banks were culpable to a large extent. I now have a very good credit score, but every time I apply for a Barclaycard I get refused, even though keep offering them to me. I think the 6 year statute barred rule is a myth.  

Barclays Bank / Barclaycard do have some quirky acceptance criteria though and it can sometimes have nothing to do with your credit history. Could be to do with CIFAS / N Hunter data, or something they hold internally on you.

Have you been though your Experian, Equifax, and Trans Union files to ensure there's nothing untoward there? Obtain a copy of your data from CIFAS and N Hunter?

My N Hunter history shows a Barclays application flagged up as "Inconsistency" from years ago despite all the data I entered being completely accurate and truthful. 

Everything recent on it has been a Clear pass though so I'm not concerned.