Obtaining a mortgage following bankruptcy?

[SixTwoSix]

Does anyone here have experience of obtaining a mortgage following a personal bankruptcy.

I declared myself bankrupt for £21k in August 2007, I was discharged in February 2008.

I have been in constant employment since November 2007 and hopefully don't see this changing in the next few years. In that time I went from a warehouse operative to team leader within 2 years and it looks promising that I should be a supervisor within the next 12 months.

My girlfriend and I are looking at getting a mortgage in 2014 for two reasons. Firstly we have calculated that by about February 2014, we should have around £12k saved towards a deposit. Secondly, it will be 6 years since my discharge in Feb 2014 and for all intents and purposes, my bankruptcy should be removed from my credit file. I am aware it isn't as simple as that and it may require some work from my end to ensure my credit file is updated accordingly.

Obviously there will still be a record of my having gone bankrupt when applying for any mortgages, I just wonder if anyone else has been in a similar position and how it has affected them?

 

[Jay794]

Can't you just get the mortgage in her name?

 

[matt100]

I'm sure it's pretty straightforward you'll just pay more interest.

Even in the credit crunch I've been able to get secured debt quite easily despite being absolutely up to my eyeballs on cards (to be fair it all gets paid still) you'd be surprised how straightforward it is. BMW gave me a car on finance when I was between 2 addresses and jobs where I couldn't get a card for a balance transfer if I wanted to so I don't bother trying.

Bottom line is once it's secured against somethign they can come and take off you if you don't pay it becomes a common sense decision rather than a blind decision like a credit card or loan where they have to rely on the credit reference info.

I'd expect if you've been banking with the same place for ages and don't want anything special like high LTV, interest only or self cert if that even exists in 2014 then it should be easy.

I just think you'll find the very best deals unavailable to you thats all.

The more deposit you can get the better, means if you default they're more likely to recoup their investment.

 

[Keltyx]

Even if it is removed from your credit file they will still ask if you have ever been made bankrupt. As others have said it will just mean you dont get the prime deal and will end up with a higher rate of interest.

 

[CharlieAlbert]

I always believed it was ten years you needed to wait before applying for any credit.

 

[SixTwoSix]

I always believed it was ten years you needed to wait before applying for any credit.

Once discharged you can apply for whatever you like. I have 2 low limit credit cards that i'm using to build a solid credit file at the moment.

EDIT: I told both companies about the bankruptcy when applying as well, they didn't care.

 

[SixTwoSix]

Can't you just get the mortgage in her name?

Well, she earns £17k a year, I earn £20k, surely together we get a higher property value open to us?

 

[Pudney]

Well, she earns £17k a year, I earn £20k, surely together we get a higher property value open to us?

Indeed, any mortgage based on just your girlfriend would be limited by her wage. At an optimistic 4x mortgage that would be less than £80k.

This is the problem I currently have, my girlfriend has a mortgage with her sister (pays nothing towards it but legally it's her debt) and any mortgage I could afford on my own would only get a small studio apartment in the area I live. Happy days!

 

[matt d938]

Is an IVA veiwed just as bad as a bankruptcy?

i.e. mortgage deals etc? would you get maybe a slightly better deal than someone declared bankrupt? or are people with bad credit etc tarred with the same brush in that respect?

Matt

 

[Will Gill]

Is an IVA veiwed just as bad as a bankruptcy?

i.e. mortgage deals etc? would you get maybe a slightly better deal than someone declared bankrupt? or are people with bad credit etc tarred with the same brush in that respect?

Matt

not as bad

However you will still only be offered similarly higher rates of interest because it decimates your credit score, basically it's worth clearing everything off your credit file before applying for a mortgage.

Based on a mates recent experience, bankruptcy takes 7 years to be removed but during that time you also have to rebuild your rating, otherwise after the note is removed you effectively start at zero and then have no chance of getting a mortgage!

 

[cm1179]

so you ran up £21k in debt, went bankrupt and all was forgotten about 6 months later?

 

[antijoke]

It wont be like that no, he was just disharged 6 months earlier instead of being held to the full 12 months.

 

[Will Gill]

so you ran up £21k in debt, went bankrupt and all was forgotten about 6 months later?

that's pretty much the long and the short of it, although before the discharge is accepted in court (£700 cost) all of your assets deemed to be non essential and of value will be seized and any car over 2.5k ish could be taken.

it's stupidly easy to do which is why so many dodgy dealers start up businesses, rack up massive debt and walk away scott free.

I opted a year and a half ago on the chin and pay off my debt (circa 80k), bloody painful but I'm about half way through now, not saying bankruptcy is a cowards way out I was lucky enough to be in a position to afford the painfully large repayments. it would have been easy to wipe it all off but even then my creditors could persue me if my earnings were deemed excessive to my 'bankrupt' requirements. But to many people it's the only option and itt;s certainly not without it's pitfalls for many many years to come.

it's a lengthy topic which i researched long and hard

 

[cm1179]

i could have a lot of fun with £21k, it's almost worth doing! but i wont.

 

[MrMoonX]

won't it be off your credit report in 6 years anyway, so august 2013 it won't show on any credit reports

 

[Will Gill]

i could have a lot of fun with £21k, it's almost worth doing! but i wont.

I had a hell of a lot of fun with the money I squandered, came back from nearly a years holiday to find the recession had wiped out my previous investments, companies I contracted for and basically left me unemployed for 6 months. Never saw it coming and never though with all the qualifications and experience I had under my belt would ever happen to me.

another one of life's lessons

 

[Will Gill]

won't it be off your credit report in 6 years anyway, so august 2013 it won't show on any credit reports

the lender will ask if you have ever been bankrupt in your application, will require to see the certificate and will definitely increase the interest offered or just deny the application all together.

for credit cards and other loans you can apply normally as most don't (oddly) ask this question - this is probably one of the reasons for the subprime crash....

 

[MrMoonX]

the lender will ask if you have ever been bankrupt in your application, will require to see the certificate and will definitely increase the interest offered or just deny the application all together.

for credit cards and other loans you can apply normally as most don't (oddly) ask this question - this is probably one of the reasons for the subprime crash....

of course you have to answer the question if asked, but they don't always ask the question. after 6 years it pretty irrelevant as far as lenders go, bankruptcy isn't a lifelong thing, they won't punish prior bankrupts after 6 years

 

[Voltjunkie]

of course you have to answer the question if asked, but they don't always ask the question. after 6 years it pretty irrelevant as far as lenders go, bankruptcy isn't a lifelong thing, they won't punish prior bankrupts after 6 years

Most mortgage applications and some other credit applications will ask if you have ever been bankrupt and score you accordingly. You have to answer this truthfully; if you lie you'd be committing fraud.

 

[Will Gill]

Most mortgage applications and some other credit applications will ask if you have ever been bankrupt and score you accordingly. You have to answer this truthfully; if you lie you'd be committing fraud.

precisely this