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Getting a Mortgage After Bankruptcy

04 February 2019 - Posted by TalkAboutDebt

Bankruptcy does not prevent you from getting a mortgage. It does, however, make it difficult for you. This article explains how to get a mortgage after bankruptcy. You may also want to read our article on going bankrupt with a joint mortgage.


How to get a mortgage after bankruptcy


Bankruptcy doesn’t mean you won’t get a mortgage but you might not get the best rates. Therefore you will find it difficult to get a mortgage if you have a history of bankruptcy on your credit file. To improve your chances of getting a mortgage after bankruptcy you may want to:

  • Wait it out: Bankruptcy will be on your credit file for 6 years if you wait until after this it could making getting a mortgage much easier.
  • Select a specialist mortgage lender: Some lenders specialise in lending to individuals with low credit ratings.
  • Offer a larger deposit: Right after being discharged you may only need to offer a 50% deposit, but this will drop over time. After 6 years you may only need 5%.


Should you avoid Bankruptcy if you want to get a Mortgage?


Being bankrupt does not prevent you from getting a mortgage in the future. However, you may want to consider other debt solutions, which may make getting a mortgage easier. Please note that getting a mortgage should not be your only reason for selecting a particular debt solution.


What is a bankruptcy search?


A bankruptcy search is done on the house you are buying not on you. It is to see if the house is subject to a bankruptcy proceeding – in which it can’t be sold.


Can I remortgage after bankruptcy?


Yes, it is possible to remortgage after bankruptcy. A remortgage is a good way to build your new credit history, as it is easier to obtain depending on the equity built into your property. However, as with getting a mortgage, remortgaging will have some difficulties.


Do I need to disclose bankruptcy on a mortgage application?


If your mortgage application asks you if you have ever been made bankrupt in the past you are legally bound to be honest, otherwise, your application could be in jeopardy. You can also ask the lender if you are able to omit this information. Please also note, when a person goes bankrupt their credit rating will be marked for a period of 6 years. After this bankruptcy will no longer be listed on your credit file.


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