Mortgage rates for ex bankrupts

Hi,

I’m considering on attempting on getting a mortgage now, 2 year’s post bankruptcy but people on here have kindly advised me rates will be about 5% and deposit being 25%. Anyone know what options will be available 3 years post bankruptcy and if it’s worth holding off?

Thanks
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Comments

  • When you say "post bankruptcy" do you mean post-registration or post-discharge?

    From my own experience -

    3 years after discharge (e.g. 4 years after registration, assuming you were discharged after the standard 1 year) you are looking at a few more lenders if you've had good conduct in the meantime and pass credit scoring - Nationwide, plus some smaller building societies.

    4 years after discharge another couple open up (e.g. Skipton).

    5 years later (i.e. when it drops from credit file, as 6 years since registered) even more and at probably highstreet / normal rates & high LTVs

    Only 6 years after will others like Leeds BS lend.

    Some will never lend (Santander) - based on current criteria (they may/may not change it in future)

    Key is to make sure it's disclosed (even if it's dropped from CRA) so it doesn't crop up later on.

    Until it drops off your file I'd say 90% max LTV - realistically more like 85% unless you've got a strong second applicant on the case. Rates don't seem to be too high at most lenders that do credit scoring. If you really find you can't pass the credit scoring, then places like Kent Reliance but they're expensive.

    There are always exceptions to the above and a few adverse credit brokers on the mortgage board. If you're less than 3 years discharged it'll be very expensive in any event.
  • Jock1
    Jock1 Posts: 13 Forumite
    Thank you for this, it’s really helpful! Unfortunately, nationwide was included in the bankruptcy so they are not looking like an option. Any idea which building societies would potentially accept at 3 year close to high street rates? You think I could get away with 15% deposit?

    Thanks
  • TheGardener
    TheGardener Posts: 3,303
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    You need to talk to a 'whole of the market' mortgage broker with experience of dealing with ex BR's. The financial markets are not very forgiving of ex BRs when it comes to mortgages. However, with a steady, decent income, scrupulous financial management post BR, the right broker and a large deposit you may be able to find something but only 3 years post BR - it is unlikely to be a great interest rate.
  • I'd definitely use a broker - just make sure any fee is not excessive and that if possible the bulk of it is only paid on completion!

    3 years since it was discharged, or 3 years registered?

    3 discharged, 15% I'd say it's certainly possible with a good broker - subject to an otherwise good record etc, as The Gardener says.

    2 years discharged for 15% deposit would be pushing it a bit too far IMO (unless you have a very good 2nd app on the case). 20%+ would be more likely
  • ACG
    ACG Posts: 23,677
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    We have got one going through at the moment, both applicants were bankrupt and had an IVA - the rate is 2.79% up to 90% LTV.

    It is difficult to give an accurate answer as it will all come down to your credit report(s). If there is not a lot on there, you could be looking at normal rates, if there is quite a bit on there, you could be looking at rates of 5% or more.

    Like wise, you may get away with a 10% deposit if there is not too much on there or you may find you need 20%.

    I would concentrate on having a bit of credit (not too much), paying it off in full each month and making your credit files look nice for in 12 months time.
    I am a Mortgage Adviser
    You 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.
  • Jock1
    Jock1 Posts: 13 Forumite
    Thank you. It will be 3 years discharged ( 4 years since registration).
  • Jock1
    Jock1 Posts: 13 Forumite
    Oh really. When you say going through now, on those rates, how many years are they discharged?

    Thanks
  • ACG
    ACG Posts: 23,677
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    3 years 1 week discharged when we made the application, offer is in hand now.
    I am a Mortgage Adviser
    You 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.
  • Jock1
    Jock1 Posts: 13 Forumite
    Thank you for this, that offers some hope and enough for me to wait another year in the hope of similar rates. I know you can’t probably give details, but as mentioned above, Nationwide was included in the bankruptcy so I’m hoping that it’s not them!
  • ACG
    ACG Posts: 23,677
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    Its not them.

    I am 99% sure you will have never heard of who it is with.
    I had never heard of them until about 2 months ago and when I talk to other brokers I know about this case, they all say "Who?!?" when I tell them the lender.

    I love the cases where you can talk the case through with an underwriter before applying and get a decision based on the merits of the case. The customers who we did this mortgage for went through a really rough time 4-5 years ago, they were given bad advice (hence the IVAs when they should have just gone bankrupt) by a company who presumably did it for the money. When we explained the case to the underwriter and everything backed up the story, he was quite happy to agree the mortgage. But the customers had done everything right in the meantime - a little bit of credit but not too much, no missed/late payments, saved the bulk of their deposit (a small gift from parents to top it up).

    12 months will fly by. It will soon be the start of winter, then the C word, then all of a sudden spring will be here and you will be thinking only a couple of months and we can get the ball rolling.
    I am a Mortgage Adviser
    You 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.
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