Getting a Mortgage After a Bankruptcy
Worried that you won’t get approved for a mortgage because of a bankruptcy on your file? The expert brokers we work with can find the right mortgage lender for you.
Read our article below, or fill in a quick form to get started with a specialist.
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Firstly, is your bankruptcy discharged or still registered?
Written by Pete Mugleston
Mortgage Expert, MD
While bankruptcy is one of the more severe forms of bad credit, with the right guidance and support, you could still get a mortgage with one recorded on your file.
In this article, we’ll tell you everything you need to know about getting a mortgage after bankruptcy, including how to go about it, what criteria you’ll need to meet and how the right bad credit mortgage broker can boost your chances of approval dramatically.
Read on for more information, or jump to the relevant topic via the menu below…
Can you get a mortgage after bankruptcy?
In short, yes. But, whilst you can still get a mortgage after declaring bankruptcy, it will narrow your options. Most mainstream banks will refuse a bankruptcy applicant, but the good news is that specialist lenders will still evaluate your case.
A specialist broker will be able to help here; they will use their contacts to pair you with the best bad credit mortgage lender based on your circumstances.
How long do I need to wait to apply?
You can apply for a mortgage as soon as you are discharged from your bankruptcy, which usually takes 12 months.
It is important to remember, however, that the more recent the bankruptcy, the less likely you will be accepted for a mortgage.
To increase your chances, we recommend that you register for the electoral roll, pay all bills on time, do not maximise your credit limits, use a credit-builder card or loan and take out a store card. In other words, do what you can to optimise your credit report and always practise good financial conduct.
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How to get a mortgage after bankruptcy
If you’re looking to apply for a mortgage after bankruptcy, there are a few simple steps you can take to improve your chances of success.
This is how we recommend you do it…
Check your credit reports
The first thing you should do is check your credit records to make sure the bankruptcy is now showing as being cleared. You can also regularly review your credit score to see how it’s improving before you apply.
Several websites, such as Clearscore and Experian, offer this as a fee-free service.
Speak to an experienced mortgage broker
The smartest move you can make, right from the outset, is to speak with a mortgage broker with the right knowledge and experience of dealing with applications of this nature rather than approaching any lenders directly yourself.
A broker can guide you to lenders who can help and also assist with the application process. We can help you with this through our free broker-matching service.
If you contact us, we can arrange for a broker we work with to contact you directly and discuss this further.
Save for a higher deposit
A way to loosen certain lender restrictions is to offer a higher deposit than the bare minimum. If you can do this, lenders will likely view you as less of a risk and, therefore, likely take a more relaxed approach to other requirements.
The minimum deposit you will be required to make will vary depending on the time since your bankruptcy and the lender’s criteria for this.
If your bankruptcy was registered one year ago, you will likely be required to have a deposit worth around 40% of the property value. In contrast, if your bankruptcy was registered six years ago, you can access 95% loan-to-value (LTV) mortgage products.
Ensure you meet lenders’ criteria
To be eligible and meet a mortgage lender’s criteria, you will need to have been discharged from your bankruptcy. You will also likely be required to provide extensive information on your current financial situation to prove you can repay your mortgage.
In addition to this, you’ll need to meet the standard eligibility requirements, which include a high enough credit rating, adequate deposit, stable income, and low enough age.
Lenders’ specific eligibility requirements for mortgages after bankruptcy will vary. The good news is that your mortgage broker can help you prepare your application, so you won’t have to do this on your own.
Which lenders have you already tried?
40% of our customers had been declined elsewhere before coming to us. The brokers we work with will be able to assess your circumstances and then identify the right lender for you instead of going direct.
Which lenders offer mortgages after bankruptcy?
At the time of writing (September 2021), there were an estimated 20 lenders who would accept applications from individuals who have been discharged from bankruptcy.
Notable specialist lenders who would accept your application providing you meet their criteria include…
Accord Mortgages
Kent Reliance
Metro Bank
Vida Homeloans.
Several mainstream lenders would also likely review your case; however, you would need to have been discharged from your bankruptcy for over four years.
As each case varies from applicant to applicant, seeking the advice and support of a bad credit mortgage broker is recommended. They will be able to review your circumstances on an individual basis and provide you with personalised advice.
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Speak to an expert about mortgages after bankruptcy today!
Being offered a mortgage is one of the greatest accomplishments in life, especially after declaring bankruptcy, and following our guide, you are now one step closer to achieving this.
We can match you with a mortgage broker who specialises in bad credit cases, can review your financial situation, and help you offer a mortgage product you are happy with. The brokers we work with can provide bespoke advice, help you with your paperwork, and introduce you to a lender who caters specifically to customers with bankruptcy on their file and is known to offer them the best rates and deals.
Call us on 0330 822 0505 or make an enquiry to be connected to the right advisor for your situation. We don’t charge a fee, and your credit rating has no further obligation or marks.
FAQs
Bankruptcy will affect your credit rating for at least six years. The longer ago your bankruptcy was, the more mortgage products will be available to you, as well as lower interest rates.
In order to prove that you have been discharged from your bankruptcy, you will need to contact the Insolvency Service and request a free confirmation letter.
If you ask for a confirmation letter, you must include your full name, date of birth, current and previous address, National Insurance number and court reference number.
In order to apply for a mortgage, you will also need a Certificate of Discharge. If you applied for bankruptcy through a court you will need to ask them for the certificate.
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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in bad credit mortgages. Ask us a question and we'll get the best expert to help.
Written by Pete Mugleston
Mortgage Expert, MD
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
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