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Mortgages for Discharged Bankrupts
We specialise in finding mortgages for people with bad credit and people that have been discharged from bankruptcy. Arranging mortgages after bankruptcy faces significantly more challenges than standard mortgages but the key is to know who to approach in these types of situations and with many years’ of experience in this market, it has meant that we have formed relationships with just the sort of lenders who are happy to work in this area.
The terms of a bankruptcy will generally state that the person that has been declared bankrupt cannot apply for any form of credit until they have been discharged from bankruptcy. It will ordinarily take 12 months from being declared bankrupt to being discharged depending on the court’s decision.
There are some lenders who are happy to lend the day after a bankrupt has been discharged. There are others that will require further months or years of sensible financial behaviour before they will consider you for any form of credit.
Those lenders who will think about lending to you as soon as you have been discharged, will not normally consider an application in excess of 50% LTV, with fees and terms that reflect the perceived additional risk.
The longer a person leaves it before applying for a mortgage after being discharged from bankruptcy, the better position they will be in to apply for a mortgage. Lenders are obviously very cautious when it comes to people with bad credit, but bad credit mortgage lenders are there and ready to help. Clients will have to meet with their pretty tight criteria, and the applicants must be able to demonstrate that they are now in control of their finances since discharge.
The percentage of a deposit required by the lender reduces the more the years go by from the day of discharge.
Once six years have gone by since the day of discharge, a bankruptcy should not prove to be the same challenge to affect a person’s application for credit. However clients must always disclose previous credit history when asked. Lenders have access to the bankruptcy and insolvency register, and they can also carry out a much more in depth credit search than the individual if they have doubts about the client. This will search all linked addresses, and any register that may hold financial information, known in the industry as the Hunter Search. Clients may not be aware that a Solicitor, when acting for the lender (could be the clients own solicitor if on the lenders panel) has a duty to check the register for bankruptcy prior to completion, and if they find the client has a history of bankruptcy they are duty bound to advise the lender. If the client did not disclose this on the application, the offer of mortgage, would in most cases, be withdrawn
We have a vast amount of experience in the market for people with bad credit and people who have been discharged from bankruptcy. As an independent mortgage broker, specialising in the more challenging area of the mortgage market, we are fully conversant in the bankruptcy and insolvency proceedings including IVA and Fast Track Voluntary Arrangements. We are equipped with the best knowledge and experience, to advise on discharged bankrupt mortgages and bad credit mortgages.
We know the specialist lenders who will not base their decision to lend on credit scoring, which applies to nearly all of the high street lenders They look at the individual person and the reasons behind the bankruptcy and will make a fair decision based on what they see, why the client went into BO, and the conduct of their finances since discharge. Our lenders want to lend, and are there to help get clients back on the property ladder, a decision to lend is made on a commonsense basis, not on how many points you score.
Talk to one of our friendly team now and we can advise you further and get you in the best shape possible to begin applying for the most suitable mortgage for you.
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More About Mortgages for Discharged Bankrupts
Despite being discharged there are still many high street lenders who may still decline your application for a mortgage or other financial product. In our eyes, we understand that as time goes on your financial situation may have changed which is why we see no reason to stop you acquiring a new mortgage after becoming a discharged bankrupt. With our access to the market we can help source you a mortgage product from forward thinking lenders that operate a policy that could provide you with that second chance.
As an Independent Mortgage Broker, specialising in the more demanding area of the Mortgage Market, we have access to the whole market including lenders that have a 'can do' approach to lending. We also understand the bankruptcy and insolvency proceedings including IVA and Fast Track Voluntary Arrangements (FTVA). We can advise with some knowledge on Discharged bankrupt mortgages or mortgages for discharged bankrupts. Many of the high street lenders use computers that assess your application against statistical data- with no discretion. You either ' fit the box' or you don't! The discharged bankrupt, does not fit a box, and the application would normally fail at the first hurdle.
Specialist lenders have a very different approach. They employ real people to assess an application for lending, real people who look for reasons to lend, rather than reasons not to lend, real people with discretion to consider each application of individual basis. The lenders we use would also understand that sometimes financial hardship, a slow down of business movement or other circumstances could have affected your business, and without the additional funding, you had declared bankruptcy whereas small additional funding could have stopped you resorting to bankruptcy. You should always seek the advice of an IFA with access to the whole of the market who will source the most competitive plan to suit your personal needs and demands.
There is now a massive return of confidence in the property market, blink and,, those pebbles that have been dropped in the London property pool have finally found their way beyond the magic circle of the M25, bringing with it that little ray of sunshine called confidence. We have seen nothing but doom and gloom since 2007 with the change in the market starting in October 2013. Since then confidence has returned to the property market with first time buyers taking advantage of the Government Help To Buy Plans, and property owners who felt trapped, now looking to move..
We are seeing a number of lenders competing for business by cutting their fixed rate mortgage products, and others bringing new mortgage products to the market, for prime and bad credit mortgages. Where we are seeing a real change is the real warming of the underwriters attitude towards discharged bankrupts from some of the more regional lenders. Not what we would like of course, but with the mainstream lenders not even prepared to consider most cases until six years after discharge, anything less than that is a real bonus. What we now have on the table for most but not all clients is access to a mortgage at 70% LTV one year after discharge at a penal interest rate, and after two years 75% LTV.. It starts to become more interesting three years after discharge when at 75% LTV and in some cases 80% LTV,the product range available to the client is the same as any other client, and after four years another lender offers the complete range of mortgage products.
For very obvious reasons none of the lenders want to make it generally known what they are prepared to consider for fear of being swamped with enquiries and upsetting the balance of their mortgage book. But is nice to see the mortgage door being opened a couple of inches, and to be able to talk about the property market in positive tones. We have a very long way to go to return to the heady days of 2006, apart from Planet London,, but this is a very firm footstep in the right direction. Michael J Alexander