Mortgages for ex bankrupts

kayleigh321

Hi, can anyone advise of a good mortgage broker or lenders for ex bankrupts? I have an excellent credit score and no issues however my hubby was made bankrupt in June 2016 so coming up to the 5 year mark this year (he has had no other issues or any defaults bar this). Hoping to move this summer ideally. We would be putting down a 15% deposit at the very least. Thanks

ACG

With a 15% deposit there are lenders who will consider you before you hit the 5 year mark, but obviously the longer you leave it the more chance of success.

As the bankruptcy is under 6 years old, it would be well worth getting a copy of your credit report as there will presumably still be some of the defaults/CCJs/Arrears on your credit report in the run up to the bankruptcy and this could have a big impact on how your application scores. 

Have you looked on google for brokers with experience in helping people with bankruptcy? There is a possibility of normal rates, but it will all depend on how your credit report looks and your circumstances, with anything like this the devil is in the detail. 

kayleigh321

There are no defaults Ccjs etc as it was HMRC who made him bankrupt, his credit score says poor however, im not sure how he could improve it until his bankruptcy drops off his file. He took out a credit card for over a year now which he pays off in full each month and he has his phone contract on there (again no issues) so he doesn’t have much credit history really think this could be why apart from the bankruptcy. I got in touch with a broker over the summer however he said because of covid all the usual ones he would go to wouldnt accept us and the only one who would required a 25% deposit with a hefty interest rate. 

ACG

Dont worry about the score. The fact it was just one large debt could be helpful with some lenders.

Personally, I think 20% would be worst case scenario with rates of around 2.5% but 15% I think is enough to at least take a look at. But you need a broker with experience in adverse and bankruptcy otherwise they are just going to go straight to the specialist lenders who will typically need a 25% deposit and charge more. 

MWT

@kayleigh321 - brokers on here cannot approach you directly to offer their services, but when you see one posting on here that you like, you can approach them if you wish...

springmagpie

My husband had a discharged IVA (3 years ago) we’ve had to use bluestone mortgages. The lowest deposit they offer is 20% 

ACG

springmagpie said:

My husband had a discharged IVA (3 years ago) we’ve had to use bluestone mortgages. The lowest deposit they offer is 20% 

Thats kind of my point in terms of using a broker who knows the market.

Did you HAVE to go to Bluestone or did you go to a broker who uses the bog standard lender for ex bankrupts less than 5/6 years discharged? Bluestone will do the job usually, but you end up paying for it, higher arrangement fees and higher rates. Most of our customers have adverse, around 15% of our customers who have been bankrupt end up with the likes of Bluestone, the vast majority end up either on the high street or with lenders not on the high street but rates are closer to 3-4% rather than the 5-7% that Bluestone are currently charging (and thats before you add in their 1% loading for ex bankrupts). 

I dont know if your broker has done a good job or taken the easy route - there is nothing to suggest they have gone down the easy route and the main thing is that you are happy obviously but some brokers will just go straight to the lender who shouts the loudest for that type of business. 

kayleigh321

That’s the lender the broker suggested to us- Bluestone! It was a 25% deposit with around a 7% interest rate. He was a broker however the estate agent put us in touch with so this may be why?

K_S

kayleigh321 said:

That’s the lender the broker suggested to us- Bluestone! It was a 25% deposit with around a 7% interest rate. He was a broker however the estate agent put us in touch with so this may be why?

@kayleigh321 This is probably (I'm saying this off limited info) a good example of what ACG outlined in his post above. With a 25% deposit and the situation as described in your post, I suspect you may have options that are a dam* sight better than a 6.5%+ interest rate with Bluestone. 

ACG

kayleigh321 said:

That’s the lender the broker suggested to us- Bluestone! It was a 25% deposit with around a 7% interest rate. He was a broker however the estate agent put us in touch with so this may be why?

This is probably the problem. The broker can get you a mortgage, but you are probably not their "normal" client. Some brokers do a bit of everything and some specialise. Come to me for shared ownership and I can do them (although I dont), but I would not really be adding any significant value as I would probably get caught out by some little quirks on shared ownership. 

I have nothing against Bluestone, they have a sort of "club" for brokers who use them a lot, we are part of that club. We have a very good relationship with them and we get better rates/products at times but they are generally a lender of last resort. If the bankruptcy were 12 months old, I would probably saying you are limited to what they will offer but once you hit the 3 year mark, your options start to open up. 

springmagpie

We were recommended for our MA by my husband's colleague. We had initially gone to another broker who advised us that there weren't any products available for us, neither of us has good credit. We didn't think we could get any mortgage for at least another year. We were happy to wait but our landlord gave us notice so we decided to buy the house we are renting. 
I know bluestone are have very high rates but it was better than having to move again