Your Essential Guide
If you have been made bankrupt, then you don’t need anyone to tell you that it can limit you when it comes to mortgages. Whether you have just been made bankrupt or you are approaching a point where it will no longer be visible on your file, it’s important to know your options. So, here is all the information you need, including why professional advice about mortgages from a trusted broker can help you to secure a good deal.
Why Does Bankruptcy Affect Your Chances of Getting a Mortgage?
Bankruptcy is recorded on your credit file for six years from the date that the order was made. During this period, you can expect getting approved for any form of credit, of which a mortgage is the biggest by far, to be a challenge. This is because most lenders, at least the mainstream high street ones, are going to see you as a risk.
However, there are some lenders out there who are a little more flexible, and you may be able to secure a mortgage by meeting criteria and having to put down a bigger deposit and fork out for higher interest rates.
How Long Should You Wait After Bankruptcy?
Let’s get the biggest question out of the way first: immediately after you have been made bankrupt, almost no lenders will consider your application. With each year that passes, your odds of securing the kind of mortgage you want will increase. That’s why most people wait as long as they possibly can before they go ahead and apply for a mortgage.
What Improves Your Chances with Lenders?
When they are looking at the application of someone who still has a bankruptcy recorded on their credit file, lenders are going to want a few specific things. The first is a healthy deposit. The closer you are to the date you were made bankrupt, the higher your deposit requirements are going to be. A lender is also going to look more favourably upon you if you are in stable employment and have a regular income; although self-employed applicants can still succeed with the right documentation.
Last but not least is your credit history since you were made bankrupt. Having a good record of making payments on time proves that you are a borrower that can be trusted to keep up the repayments on your loan.
How Mortgage Brokers Help
Working with a mortgage broker is so, so important if you have been made bankrupt and it is still visible on your file. A broker is there to act as an intermediary between you and a lender, and their care and attention to detail will increase your chances of success. They know which lenders are going to be more flexible when it comes to approving applicants with a history of bankruptcy, and they will know how to present your application in the best possible light.
What to Do Now
Although bankruptcy is a hurdle when it comes to applying for a mortgage, with the help of a broker, it is one that you can clear! So why not get in touch with a trusted team today?
