Mortgage after Bankruptcy

Mrh1019

Hi all, I posted for the first time the other day and was hoping someone could give me a little more advice please x We are now almost seven years post bankruptcy but I’m a little stressed about our chances of getting a mortgage.  I have just completed a Masters and halfway through the course my funding was pulled. As I had good credit at this point I got an interest free credit card to pay my fees on in order to complete the course. I paid the minimum payments whilst at uni but since I started working I’ve managed to clear all but £1500.  Will this be frowned upon though as I’ve had debt again since the bankruptcy? I really didn’t want to drop out and I feel I did the right thing as I’m now qualified and have substantially increased my salary. Does anyone know if this is likely to be an issue with mortgage providers? I see a lot of posts saying keep your credit file ‘squeaky clean’ in order to get a mortgage. Does this mean don’t get credit or pay it on time?

Thanks for reading x

jamielutz1987

Keeping a clean credit history means meeting the obligations under any credit commitments that you enter into. For a credit card, that would mean making the minimum payments required on time.

The size of your debt will affect affordability but at £1500 is unlikely to have any noticeable impact.

With regard to how a discharged bankruptcy affects your mortgage chances, AFAIK if it's been 6 years since discharge, you should have access to some mainstream rates though only a broker will be able to say for sure after looking at the whole picture.

dimbo61

Check your credit file with the main credit reference agencies yourself 

haras_n0sirrah

I have placed a number of cases for people post bankruptcy. One 6 years discharged you will have access to a number of high street lenders 

betterdaysahead

haras_n0sirrah said:

I have placed a number of cases for people post bankruptcy. One 6 years discharged you will have access to a number of high street lenders 

I repeatedly see mention of 6 years post discharge being a big thing. Unless I'm very much mistaken, it's 6 years post bankruptcy that is the most important thing. At that point your bankruptcy and any defaults, etc will be removed from your credit reports. Also, there are a few lenders, such as Halifax who will ask the question 'Have you been declared bankrupt in the past 6 years?'. I recall a few years back someone on these forums kindly compiled a list of which mortgage lenders have criteria like this, and those who will consider ex-bankrupts but where you will be required to detail the bankruptcy. I wish I could find that link for you, but I can't seem to. I would also be keen to see it again as I have recently got to the 6 year mark (post bankruptcy, not discharge) and will be looking for a mortgage soon.

Dinpraad

betterdaysahead said:

haras_n0sirrah said:

I have placed a number of cases for people post bankruptcy. One 6 years discharged you will have access to a number of high street lenders 

I repeatedly see mention of 6 years post discharge being a big thing. Unless I'm very much mistaken, it's 6 years post bankruptcy that is the most important thing. At that point your bankruptcy and any defaults, etc will be removed from your credit reports. Also, there are a few lenders, such as Halifax who will ask the question 'Have you been declared bankrupt in the past 6 years?'. I recall a few years back someone on these forums kindly compiled a list of which mortgage lenders have criteria like this, and those who will consider ex-bankrupts but where you will be required to detail the bankruptcy. I wish I could find that link for you, but I can't seem to. I would also be keen to see it again as I have recently got to the 6 year mark (post bankruptcy, not discharge) and will be looking for a mortgage soon.

Curious to see that list too if it's out there

Mrh1019

dimbo61 said:

Check your credit file with the main credit reference agencies yourself 

Thank you, I have and it’s over 900.  I just wondered if underwriters might think I haven’t changed my ways so to speak xx

haras_n0sirrah

I looked into it recently as I placed a case a couple of weeks ago for someone from here who had tried other brokers and not got anywhere but in her case (5% deposit, shared ownership) we had to wait till 1 day past 6 years discharged.
Other lenders I recall being 3 years, 5 years or 6 post discharge in the main (but the 5% deposit is a bit more restricted as you can imagine)

KeepOnKnitting

betterdaysahead said:

haras_n0sirrah said:

I have placed a number of cases for people post bankruptcy. One 6 years discharged you will have access to a number of high street lenders 

I repeatedly see mention of 6 years post discharge being a big thing. Unless I'm very much mistaken, it's 6 years post bankruptcy that is the most important thing. At that point your bankruptcy and any defaults, etc will be removed from your credit reports. 

It is six years post discharge, as lenders can mark your file as defaulted up to the date of discharge. So six years after discharge is the date that the last possible default marks must be removed from your file.

As for the bankruptcy record itself, I am unsure, but I suspect this falls off six years after the date of bankruptcy, provided it is discharged. The reason I say this is because I had a CCJ which fell off six years after being recorded, not six years after settlement. If someone else knows different, I would appreciate knowing.

For the OP, it sounds like your record is clear if you have always paid at least your minimum payment on time. If I can get a mortgage (bankrupt in 2015) I think you could too. Good luck!

betterdaysahead

KeepOnKnitting said:

betterdaysahead said:

haras_n0sirrah said:

I have placed a number of cases for people post bankruptcy. One 6 years discharged you will have access to a number of high street lenders 

I repeatedly see mention of 6 years post discharge being a big thing. Unless I'm very much mistaken, it's 6 years post bankruptcy that is the most important thing. At that point your bankruptcy and any defaults, etc will be removed from your credit reports. 

It is six years post discharge, as lenders can mark your file as defaulted up to the date of discharge. So six years after discharge is the date that the last possible default marks must be removed from your file.

As for the bankruptcy record itself, I am unsure, but I suspect this falls off six years after the date of bankruptcy, provided it is discharged. The reason I say this is because I had a CCJ which fell off six years after being recorded, not six years after settlement. If someone else knows different, I would appreciate knowing.

For the OP, it sounds like your record is clear if you have always paid at least your minimum payment on time. If I can get a mortgage (bankrupt in 2015) I think you could too. Good luck!

I think this is where some of the misunderstanding comes from. Defaults can be marked on your file until you are discharged. However, they must then be corrected to the date of bankruptcy. If you ensure your credit file has been cleaned up and updated correctly by the lenders involved, your credit file will be entirely clean 6 years from the date of your bankruptcy. Obviously, if a lender asks 'have you ever been declared bankrupt' this still needs to be disclosed.

kingstreet

I can think of two large high street lenders who use "six years from registration" not six years fro discharge. One tells us to answer no to the bankruptcy question if it was registered more than six years ago.