Can I get a Mortgage after Bankruptcy
It is possible to get a mortgage after bankruptcy but you will need the help of a specialist company. Further to this, it’s important to remember that a mortgage after bankruptcy will cost you more, however, there are ways to reduce this cost.
When you apply for a mortgage after bankruptcy, a lender will consider you high risk. As such, their rates will be higher. Further to this, a broker may have to work harder to find you the correct mortgage, hence their fees may be higher.
To increase the chances of a successful application and lower rates, the following information will help.
Organisations that can help
The three main types of organisations that can help you to find a mortgage after bankruptcy are:
- Lenders (mortgage provider)
- Brokers (mortgage arranger)
- Introducers
Sometimes it can be beneficial to apply direct to a lender for a mortgage. For example, if you have developed a credit history with a provider after bankruptcy.
Brokers can specialise in getting people a mortgage after bankruptcy. Unless the broker is tied to a particular lender, it will generally have access to a number of lenders and will be able to help you select the best mortgage for your circumstances. They may also assist you with your application and provide mortgage advice.
Introducers act in a similar capacity as a broker, however, they will not usually give advice. They recognise that you have a requirement for mortgage and introduce you to a broker or a lender that can help you further.
Before Applying for a Bankruptcy Mortgage
When you apply for a mortgage after bankruptcy, the lender will assess your credit report. It is highly likely that following bankruptcy your credit report will contain inaccuracies. This could cause a lender to decline your application for the mortgage.
To avoid being declined, you must order your three credit reports and check that they are accurate BEFORE applying for your mortgage.
The three credit reference agencies are:
- Experian
- Equifax
- Call Credit
Reducing the Cost
To reduce the overall cost of the mortgage, it’s a good idea to look at a few key considerations. The less risky you are to the lender, the cheaper the mortgage will be.
- Credit report – make sure it is accurate. Don’t get declined or charged unnecessarily high fees and rates.
- Deposit. The higher your deposit the greater the chance of a successful application and better rates.
You may also find it useful to Shop around. This is where a broker or introducer may help. You should compare:
- Arrangement & broker fees
- Redemption penalties
- Interest rates
- Mortgage type (fixed / variable)
- Tie in period
