The Facts About Getting A Mortgage after Bankruptcy
If you have been in the unfortunate position of finding yourself bankrupt and wanting to get into the property market you may be wondering what options are open to you in terms of getting a mortgage after a bankruptcy. Well, you may be pleasantly surprised to find that there are more opportunities than you thought possible.
Many people incorrectly assume that obtaining a mortgage after bankruptcy will be something which they can only dream about. In today’s mortgage market this couldn’t be further from the truth. If you have recently found yourself bankrupt and are seriously considering applying for a mortgage, don’t despair. If you approach the application for a mortgage after bankruptcy in the right way you will find yourself in a pretty good situation which may even enable you to successfully obtain a mortgage in a matter of days following your discharged bankruptcy.
The First Steps
Obtaining mortgage finance after bankruptcy is not going to be the easiest thing you have ever done but this does not mean that it is impossible. Getting a mortgage after bankruptcy will depend on the other details taken into account during your application. Securing a mortgage after bankruptcy will be heavily dependant on your guaranteed income and the percentage of the property value you intend to put down as a deposit. So the first steps will be reliant on your ability to provide both of these elements.
A Few Tips
Following bankruptcy many lenders will not let you borrow for a period of at least two years from the time of your bankruptcy discharge. Consider this two years as the benchmark from which obtaining a mortgage after bankruptcy becomes a lot easier. The best way to ensure that this happens is to properly manage all your debts from the time of bankruptcy discharge onwards. This means paying all of your repayments on time and repairing the status of your credit rating.
Timely Repayment
If you are hoping to get a mortgage after bankruptcy in 2 years or less from the time of the bankruptcy discharge, you will need to have an almost perfect payment history since your bankruptcy discharge. This means you must continue paying off other debts such as your personal and car loans that were not discharged in the bankruptcy.
The Deposit
The chance of getting a mortgage after bankruptcy is massively increased by the amount of deposit which you have to put down on the property. As little as a 5% deposit may be enough to help you get approved but the more you have the greater the chance of success and the better mortgage rate you are likely to be offered.
Reduce Further Debt
By minimising the amount of other debts such as credit cards or loans you are substantially increasing your chances of obtaining a bankruptcy mortgage. Don’t forget that your debt-to-income ratio will be taken into consideration by the mortgage providers so all other debt should be eliminated if possible.
Do Check Your Credit Report
Don’t assume that the information held on your credit report is always correct. It may contain errors so it makes sense to look for yourself to ensure its accuracy. You can purchase a copy of your credit report through credit reporting agencies for as little as £2. Alternatively, bearing in mind how important this is checkmyfile.com offers you the opportunity to see what lenders see – and have your report based on your choice of credit reference agency data for just £6.95. Always remember that every inaccurate piece of information contained within the report may work against you. If you find an error, report it as quickly as possible. This will speed up the correction of any mistakes within the report. By monitoring your credit report you are guaranteeing that the creditor’s view of your credit history is a fair and accurate one. The removal of any inaccurate data will help establish a more favourable debt-to-income ratio.
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