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Original poster

Is it possible to get a mortgage after bankruptcy ?

22 replies

Pisssssedofff · 05/10/2016 18:23

Really long story, it's not me but the people renting our family home have through no fault of their own been made bankrupt. They clearly pay their bills, rent is never late. At the end of their tenancy they would like to buy the house. Ex husband doesn't believe they will be able to. Even if 6 years has passed. Does anyone know for certain yes or no ?
Thank you

OP posts:
user1474627704 · 05/10/2016 18:25

There is no certain yes or no. It's possible but its unlikely.
It depends on their own situation though, no one here can tell you.

Bailey101 · 05/10/2016 18:28

If they're discharged, there's mortgage providers that could offer them a mortgage - it depends on their individual circumstances. Their best bet is to speak to a mortgage advisor who can go through all the options.

HereIAm20 · 05/10/2016 18:28

It is possible that only one of them was made bankrupt and that they could buy it in the other's name. If they are the tenant's why don't they buy it now or try to and then they would know and would know whether they need to renew the tenancy.

Original poster
Pisssssedofff · 05/10/2016 18:28

So not totally out of the question ... This is so tricky

OP posts:
blueturtle6 · 05/10/2016 18:33

The fact they have paid rent on time for six years will help them, but they may have a trickier time finding a lender and the terms may not be as beneficial. A broker may be able to help in those circumstances

user1474627704 · 05/10/2016 18:47

It is possible that only one of them was made bankrupt and that they could buy it in the other's name

Not if they are married.

Reckoning · 05/10/2016 18:50

We got a mortgage after a discharged bankruptcy with a high street lender on a standard rate for a 10% deposit. Went through a broker who sounded completely nonplussed at the bankruptcy! The bankruptcy was discharged about 7years before applying for the mortgage.

Original poster
Pisssssedofff · 05/10/2016 18:52

They are definitely married

OP posts:
mum2Bomg · 05/10/2016 19:00

Yes but only with certain lenders - they'll need a financial advisor and have to be straight with them.

Palomb · 05/10/2016 19:04

Yes. I have a mortgage and I'm a (10 year) discharged bancrupt.

There were some lenders that were an outright no but our broken didn't seem at all phased by it and said it wouldn't be a problem and it wasn't.

Palomb · 05/10/2016 19:06

My bankruptcy doesn't even show on my credit file now either. No public records it says. Obv not something you can lie about as if the lender finds it they would be well within their rights to pull the mortgage at the last minute which would be awful. I think it's 7 years till it's off your file.

ceeveebee · 05/10/2016 19:07

Yes but will be with a specialist lender and a high interest rate.

FlappyRose · 05/10/2016 19:14

While an individual is bankrupt (usually 12 months) they won't be able to get a mortgage. Bankruptcy is on your credit file for 6 years and, after discharge but before the end of that 6 year term, it is possible to get a mortgage, although obviously difficult. It depends on the lender and a good broker will help.

After the bankruptcy is removed from the individual's credit file, a lender wold not know if they had previously been bankrupt from a credit check. 'Have you ever been bankrupt?' is usually a question on a mortgage application form and the individual should answer honestly. Having said that, in my experience only, lenders don't mind historic bankruptcies provided a current credit check is acceptable.

shartsi · 05/10/2016 19:17

i'm married and was able to get a mortgage in my name only

FlappyRose · 05/10/2016 19:20

Yes, and bankruptcy is an individual thing. You can't be made bankrupt jointly, although a couple could both be made bankrupt individually if they both have debts.

Reckoning · 05/10/2016 19:26

ceevee not true. Ours was the same rate we would have got without the bankruptcy with Barclays. We only had a 10% deposit too.

user1474627704 · 05/10/2016 19:30

Bankruptcy is an individual issue, but a mortgage on a family home is not.

FlappyRose · 05/10/2016 19:54

User - could you explain what you mean? There are many, many examples of couples living in family homes with a mortgage in one of their names only.

Butlerbabyno2 · 05/10/2016 21:11

Basically only one person in the couple can have been made bankrupt however this affects anyone financially linked to them ie husband/wife - financially linked can be registered at same address, joint bank account etc. However it depends on the non bankrupt persons rating as to how much this affects them. You can obtain a mortgage after you have been discharged a bankruptcy order - however advice is to wait until you have been discharged 6 years (I know this as I actually am in the mortgage dept at a high street lender) and if you are accepted then it would be at the same rate as everyone else with it been a high street lender the rate goes on what LTV you are (amount of borrowing compared to value of house) not your rating. However if you do not want to wait the 6 years or are still declined then a specialist lender may consider but at a higher rate. My advice would be for your tenants to check their credit rating - experian.co.uk as most lender use this credit reference agency to get an idea of what rating they have currently and other than that the only thing they can do is try.
Sorry for the long post! X

Original poster
Pisssssedofff · 05/10/2016 21:19

That's super helpful thank you.
I'm guessing they are waiting for the discharge and to save a deposit hence why they need me to wait. Dickhead was implying waiting was too big a risk, doesn't sound like it is at all and chances are house prices will rise in the next two years so I can't loose.
Thank you everyone x

OP posts:
FlappyRose · 05/10/2016 21:50

Just to add that being a relationship with someone, being married or living at the same address does not create a financial link. A financial link is only created by joint credit accounts, such as a mortgage or loan.

Butlerbabyno2 · 05/10/2016 22:08

Yeah so joint on a rental agreement - should have made that clearer x

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