Mortgages For Discharged Bankrupts

Mortgages for discharged bankrupts

This page was last updated on 1 October 2021

Mortgages For Discharged Bankrupts In 2021

Which mortgage lenders accept bankrupts?

There is no hard and fast rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. Mortgage lenders who lend to discharged bankrupts generally consider each unique case individually.  There are a few different things, luckily , that can make you more likely to get a mortgage. When requesting a mortgage after bankruptcy, lenders will consider your credit history, income, and outgoings.  You should strongly consider using a mortgage broker if you are concerned about your mortgage eligibility. They can help you find the right lender and mortgage, given your credit history.

Topics that you will find covered on this page

You can listen to an audio recording of this page below.

 

.

 

Can I get a mortgage after declaring bankruptcy and being discharged?

Buying a house after bankruptcy can be challenging, but bankruptcy mortgages are not impossible. What is more, you can normally still access a range of lenders and types of mortgages. 

So, even if you want help to buy mortgages, buy to let mortgages, or a bad credit mortgage, there are standard lenders and specialists out there that can help. 

Having bankruptcy on your credit file can also affect your ability to access equity release. The good thing is that with the right help and advice you can get a mortgage with a similar LTV and interest rates to what other borrowers get. 

Here is a useful video that explains the impact of mortgage and bankruptcy.

Which mortgage lenders accept bankrupts?

There is no hard and first rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. Mortgage lenders who lend to discharged bankrupts generally consider each unique case individually. 

There are a few different things, luckily , that can make you more likely to get a mortgage. When requesting a mortgage after bankruptcy, lenders will consider your credit history, income, and outgoings. 

You should strongly consider using a mortgage broker if you are concerned about your mortgage eligibility. They can help you find the right lender and mortgage, given your credit history. 

Can I get a mortgage after declaring bankruptcy and being discharged?

Buying a house after bankruptcy can be challenging, but bankruptcy mortgages are not impossible. What is more, you can normally still access a range of lenders and types of mortgages. 

So, even if you want help to buy mortgages, buy to let mortgages, or a bad credit mortgage, there are standard lenders and specialists out there that can help. 

Having bankruptcy on your credit file can also affect your ability to access equity release. The good thing is that with the right help and advice you can get a mortgage with a similar LTV and interest rates to what other borrowers get. 

How long after bankruptcy can I get a mortgage?

The first thing you should know is that mortgages after bankruptcy are only available provided you have had official bankruptcy discharge. 

Typically, getting discharged takes around 12 months. However, it is decided by the courts, so give your situation it could be shorter. Sometimes, people experience delayed discharge. 

Once courts agree, discharged bankrupts can get started applying for mortgages for discharged bankrupts. 

Even for discharged bankrupts, mortgages can be harder to get. The reality is that mainstream and specialist lenders need to trust you can make repayments. Typically, lenders will have strict criteria that you need to meet in order to get a bankruptcy mortgage. 

As a general rule, the sooner you apply for a mortgage after bankruptcy the harder it will be for you. For example, you will probably need to have a large deposit and a lower Loan-To-Value (LTV). You might also be charged more interest. 

Mortgage brokers can help you get started when it comes to finding a lender that might accept you for a home loan. Advisors can also help when it comes to your mortgage options, particularly self employed mortgages. If you are self-employed, getting a mortgage can be even harder. 

"There is no hard and first rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. Mortgage lenders who lend to discharged bankrupts generally consider each unique case individually."

Could I be eligible for a buy to let mortgage after bankruptcy?

Yes, there are lenders out there that may grant you buy to let mortgages. 

To get a buy to let mortgage you often need to meet the following conditions:

  • Have excellent credit since being discharged, with a credit report to prove it
  • Discharged for at least 3 years 
  • Be able to put a 15% deposit down on buy to let mortgages

So, even if you are someone with bad credit, mortgages are still an option. 

What are first time buyers’ options?

As a first time buyer, a mortgage after bankruptcy is still possible. For the best deal on a mortgage, you should wait a few years after discharge. You should also maintain an outstanding credit rating. 

First time buyers can ensure good credit by paying all bills on time, and not applying for any credit before requesting a mortgage. 

Can I get shared ownership mortgages?

Shared ownership is a government mortgage scheme that helps those with a low income get a home. You buy an agreed portion/percentage of the home, and pay it off with a mortgage. Then you just pay rent on the remainder of the home. 

However, as with all types of mortgage, your credit history here can make your mortgage application unsuccessful. So, the best thing to do is get professional mortgage advice to help you apply for your mortgage.

What makes it so hard to get mortgages after bankruptcy?

Essentially, high street banks see you as a risk. When you have bad credit, mortgages may be withheld because lenders think you might not meet repayments in the future. 

Even if you are discharged from bankruptcy if you still have bad credit, mortgages can be hard to get. You should seek advice on the best steps to take, for example you may need to agree to a lower LTV.

get a mortgage after bankruptcy

Below you can see the best mortgage deals on the market.

Some of these deals are also available for those that have been previously been made bankrupt.

Get FREE help and advice in choosing the right one for you.

Will lenders know about my previous bankruptcy after I am discharged? 

Getting a mortgage after bankruptcy is often a challenge, because even after discharge your history will be known. Your previous credit issue will continue to show on your credit report for 6 years. 

After these 6 years are up, many people think that there will be no issue when they try to get mortgage after bankruptcy.  

Will the lender ask what caused my bankruptcy?

When trying to apply for a mortgage with bad credit then a lender will probably ask what caused you to go bankrupt. 

However, disclosing this information might help you get a mortgage with bad credit. If bankruptcy was due to factors out of your control, they are more likely to give a mortgage for discharged bankrupts. 

So, if you declared yourself bankrupt because you lost your job, had a marriage collapse, experienced a long term health issue, or lost your business, a lender might be more understanding when it comes to your credit score. 

mortgage for discharged bankrupts

What happens to secured loans in bankruptcy?

While secured loans are not included in bankruptcy they will still have to be paid back and cleared. When your home is sold in bankruptcy it will be paid off. 

Why was my mortgage rejected after passing the credit score stage?

This is why help to buy a home after going bankrupt is so valuable. The mortgage application takes a lot of time and fees aren’t always cheap. So, you should get mortgage advice to increase the probability your application gets approved. 

Will other credit problems that arise after bankruptcy discharge impact my mortgage application?

Lenders assess your application using your credit score, to determine what risk you could pose to them. 

After bankruptcy you are seen as a more risky borrower. But, there are still bad credit mortgage lenders out there. Professional advice can help you discover whom these are. 

However, if you have other credit issues since going bankrupt and being discharged your chances of getting a mortgage will be even lower. If you want to have your mortgage application approved, you really need to maintain an outstanding credit file.

mortgage after bankruptcy

How can I boost my credit for a mortgage?

If you have been bankrupt previously you really want to avoid any further credit issues. These will severely minimise your chances of getting mortgage application approval. 

So, make sure your bills are all paid on time. Otherwise your credit will fall and you may not be given the right to buy. 

Can I use equity in my home to pay off my bankruptcy?

This strategy is known as an annulment, and can get your bankruptcy taken off your credit file. However, it is rare. 

To do this, you would need to find lenders that are happy to give you a secured loan. Whether a lender will do this depends on the situation that caused your bankruptcy. Because you will likely have limits put on your borrowing, so you will need to find specialist lenders. 

If you meet all your repayments on time, the mortgage lender may then allow you to switch back to a normal mortgage. 

Due to the risks associated with boosting your credit in this way, speak to advisors before doing anything. Always ensure the advisors you speak to are regulated by the Financial Conduct Authority

What can I do to help my mortgage application be successful after discharge?

The first thing you should do is check your credit score with the three main agencies in the United Kingdom. Then you can speak to advisors and make a decision about whether your credit history will be sufficient to successfully apply for mortgages. 

If you have bad credit, mortgage approval can be hard. To increase your chances of getting mortgages, bad credit might need to be addressed first. Mortgage brokers can explain what you should do to improve your credit. 

It is also crucial to find out your credit score because sometimes mistakes show on your report. If you or advisors spot these errors then you can query them and increase your chances of getting a mortgage.

Even after discharge you might not be eligible for all mortgages. So, you should get some professional mortgage advice and see if you are likely to be accepted for a mortgage. Applying involves costs, so it can be worth waiting until your chance of acceptance is high. 

mortgages for discharged bankrupts

What should I do if my mortgage chances are deemed low?

When you get mortgage advice you might be told you wont get mortgages- bad credit is normally to blame here. 

So, the best thing you can do is improve your credit score. When you improve bad credit, mortgages become more accessible. So get started as soon as you can, and seek professional advice to help you get your credit score up quickly.

If you are self-employed, ensure you provide reliable and comprehensive evidence of your income. Mortgages are typically harder for those on fixed-term contracts to get, without bankruptcy history. So, solid evidence is crucial for mortgages. 

Do I need to prove I have been discharged?

If you are wanting to buy mortgages or other financial products you will likely need to give proof that you have been discharged from your bankruptcy. 

Unfortunately you will not be sent this proof automatically. You will have to request proof from the Insolvency Service. 

You can do this by emailing the following details to discharge.queries@insolvency.gov.uk:

  • Name
  • Date of Birth
  • National Insurance Number 
  • Previous and Current Addresses
  • Court Reference Number 

This proof is free to obtain, however most high street and specialist lenders will not just want this proof when considering your mortgage. 

To buy mortgages, you typically need a Certificate of Discharge. There are two ways you can get this:

  • If your bankruptcy application went through a court they will give you a certificate. The cost is £70 initially and £10 for any other copies you need. 
  • If you submitted your bankruptcy application online you can email discharge.queries@insolvency.gov.uk . This is free!

When will my restrictions be relieved?

If you have restrictions put upon you due to your bankruptcy these can continue even after you are discharged from bankruptcy. They will only stop when the bankruptcy restrictions undertaking period comes to an end. 

Can bridging loans help me avoid future bankruptcy?

You might want to consider a bridging loan if you are applying for a mortgage but haven’t yet been able to sell your own home. 

It may take some time, a few months perhaps, to find a buyer for your home. If you wait too long, the house you wish to buy might fall through. Bridging loans can provide you with a short term loan that enables you to buy the home. 

This can help you avoid bankruptcy by trying to find the money yourself or from other sources. However, bridging loans typically have very high interest charges. So, speak to a professional and see whether it is really necessary for you to do this to get a mortgage.

Below you can see the best mortgage deals on the market.

Some of these deals are also available for those that have been previously been made bankrupt.

Get FREE help and advice in choosing the right one for you.

Learn More About Mortgages In The UK

How do mortgages work in the UK?

Buying a home or land is expensive. A mortgage is a financial product that helps people purchase their own home or land.This is especially true for a first time buyer, as it might be the only route onto the property ladder.

The minimum credit score for a mortgage

ou can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

fixed term Contract Mortgages

A fixed term contract is a way of describing certain types of employment. If your current employment contract is due to end after a certain period of time, or after a specific piece of work is complete, you are likely on a fixed term contract. 

how long does a mortgage application take?

After sending off the final application waiting for the decision can be frustrating. Many prospective homeowners ask ‘how long does it take?’ but the truth is the mortgage approval process is always different for each customer.

how long does conveyancing take?

The entire conveyancing process will normally take anywhere between 8-12 weeks, however you should be prepared for this to take much longer depending on your circumstances and wider factors. This articles explores what the timescale involves.

Mortgages if You are bankrupt

There is no hard and fast rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. They will lend to discharged bankrupts and consider each case individually. 

what stops you getting a mortgage?

Everyone wants to get the best deal when it comes to buying a home and getting a mortgage when they buy a home. However, being too ambitious can lead to your application being rejected. 

how much do mortgage advisors charge?

Fees for mortgage brokers can be off-putting. A mortgage is an expensive financial product, and often buyers want to save as much money as possible. This might limit their options when it comes to using a mortgage broker.  However, not everyone advisor charges a fee.

IVA Mortgage

When you have an IVA, mortgage acceptance is still possible. However, involuntary agreement mortgage lenders can be hard to find. Typically, a high street company will be more less keen to give you a mortgage. 

Share this page

Share on facebook
Share on twitter
Share on email
Share on linkedin