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Being discharged from bankruptcy can feel like a huge weight has been lifted off your shoulders – although you may still be worried about its long term effects. If you are thinking of remortgaging after bankruptcy, you may still have a chance of finding a deal that works for you.
Choosing a lender that understands your situation is an important first step and here we explain what to expect and how to make a more informed decision for your finances.
Your bankruptcy will be recorded on your credit report and remain there for six years from the moment you have been discharged– or longer if it has been extended.
This means when lenders perform a credit check they will be able to see that you have been made bankrupt.
To get a better idea of the type of information lenders can see you can request a free copy of your credit report from either:
If you need more advice about applying for a new mortgage after bankruptcy, the Willows team will be more than happy to answer any of your questions.
Once your bankruptcy has be discharged you will have more options available to you to remortgage. We can speak to our specialist lenders to start to explore options.
It is highly unlikely that you will be able to remortgage whilst you are still in bankruptcy.There will usually be restrictions on the amount of credit you can take out until you have been discharged and you will also need the approval of the appointed trustee for your bankruptcy.
Being employed or self-employed will not impact your eligibility to remortgage. This includes if you have previously been made bankrupt.
The lenders we work with will base their decision on several factors, including your ability to maintain the repayments. They will ask you to provide proof of your income and outgoings, as well as any other relevant documents required to meet their eligibility criteria.
You can speak with a member of the Willows team to discuss your options, and we’ll guide you through the application process from start to finish.
We work with a host of specialist lenders who are experienced in helping people with a bad credit history to remortgage.
The deals will largely be the same as normal, with fixed and variable rate options usually made available.
The main difference will be the interest rates, as to manage the risk involved, lenders tend to apply higher rates for people with an adverse credit history.
To get a better idea of what to expect, you can speak with the Willows team about the types of mortgages that may be available to you.
Whilst your credit score will be considered when reviewing your application, the specialist lenders we work with will not base their decision solely on your credit history most in fact ignore credit score.
They look at all the factors involved and focus on human input, which helps to form a more rounded decision than just relying on automated decisions.
So, as long as you meet the lender’s criteria, like loan to value (LTV) and can afford to maintain the repayments for the full duration of the mortgage, you should be in a position to receive an offer.
When talking about your property’s equity, this refers to the difference between your home’s value and the amount still owed on the mortgage.
During bankruptcy, the appointed trustee could potentially seize any available equity to repay your debts. This could mean selling your home or issuing a charging order to release the funds.
As a result, it will likely make it more difficult for you to have a high enough loan-to-value (LTV) to qualify for a new mortgage.
If this applies to you, try to avoid applying for a mortgage for at least 12-18 months after being discharged from bankruptcy. This will mean you have more time to rebuild your credit whilst also avoiding rejected applications that can negatively impact your credit score.
Many of the lenders we work with take a flexible approach and will not necessarily require you to be completely debt free before taking on a new mortgage.
Once you apply, they will conduct an affordability assessment to get a better idea of your financial situation.
If they believe that the new mortgage payments will not affect your existing debt commitments, they may not ask you to clear your existing debts.
If you apply directly to a lender, the main problem you could experience is that they may not offer specialist deals for people with poor credit histories. Most mainstream lenders prefer to wait until the bankruptcy has been removed from your credit profile – which usually takes a minimum of six years (or sooner if the bankruptcy has been annulled).
Using a broker may give you more options when it comes to finding a mortgage deal that fits into your budget.
A good broker will take time to understand your situation and try to match you with an appropriate lender based on your circumstances.
At Willows, we work with several specialist lenders who are open to taking applications from people who have previously been made bankrupt, which could improve your chances of securing a deal.
Being employed or self-employed will not impact your eligibility to remortgage. This includes if you have previously been made bankrupt.
The lenders we work with will base their decision on several factors, including your ability to maintain the repayments. They will ask you to provide proof of your income and outgoings, as well as any other relevant documents required to meet their eligibility criteria.
You can speak with a member of the Willows team to discuss your options, and we’ll guide you through the application process from start to finish.
When assessing a joint application, lenders will look at both credit profiles to better understand your affordability and current financial position.
If you both own the property and one of you has previously been made bankrupt, this will be taken into account.
When applying for a new mortgage after bankruptcy, you will usually be asked to provide:
Lenders will also ask you to provide a discharge certificate, which you can request.
If you have previously experienced bankruptcy, you should expect to pay higher interest rates for your mortgage. This is because an adverse credit history increases the risk for lenders, who may have concerns about your ability to repay the full amount.
There may be additional fees or conditions applied by lenders to applicants with a history of bankruptcy. This tends to vary depending on the lender, so it is
something you will need to clarify before you accept any mortgage offer.
Getting a quote won’t affect your credit score
While it’s true that a previous bankruptcy will present more challenges when applying for a new mortgage, there are lenders that are willing to help.
Willows work with a variety of established lenders that specialise in offering loans to people who have been discharged from bankruptcy.
To find out more about how we can help, or if you have any questions about the type of properties accepted by secured loan lenders, you can speak with one of our expert advisors today by calling 01656 766 158.
If you have a question – we’d be happy to talk to you – simply call us…
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At Willows Finance Ltd, we appreciate that your privacy is extremely important to you. With this in mind, we have put in place a number of measures to ensure that any personal details we obtain from you as a result of visiting this website is processed and maintained in accordance with accepted principles of good information handling and also in accordance with the Data Protection Act 1988.
This statement provides you with details of the type of information we may hold about you, how we obtain and use information and how we protect your privacy.
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Authorised and regulated by the Financial Conduct Authority
Firm Reference Number: 670052
Company Number: 6678545 (Registered in England and Wales)
This document outlines the services we provide. If you need clarification, please contact us at 01656 766158.
We offer first and second charge regulated mortgage contracts for business or personal use.
Other finance options may include:
Regulatory Status:
We offer an advised mortgage broking service and provide enough information for you to make an informed decision.
We are not independent financial advisers. Free debt advice is available from the Money Advice Service.
You can view our privacy policy at: https://willowsfinance.co.uk/privacy-cookie-policy/.
Lenders may also have their own privacy policies which will be provided to you.
We charge a broker fee upon loan completion. The average fee is approximately 5%, depending on your situation.
Fee details:
No refund is offered after completion. You may pay upfront or add the fee to your mortgage. Fees and commission will be detailed in your ESIS and Mortgage Agreement.
You will receive a Mortgage Agreement and an ESIS document detailing:
You may cancel your application anytime before completion without any charge. Mortgages cannot be cancelled after completion.
Missing payments can lead to charges, repossession, and negative impacts on your credit rating.
Consolidating debt may result in higher long-term interest. Securing debt against your home increases risk.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loan secured on it.
If you wish to complain, contact us at:
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Tel: 01656 766158
You may be able to refer your complaint to the Financial Ombudsman Service.
We are covered by the FSCS. You may be eligible for compensation of up to £85,000 per person per firm for mortgage advice and arranging.
More info: www.fscs.org.uk
After processing your application, you’ll receive a Mortgage Agreement and have a 7-day reflection period.
Contact us during this period with any questions. To proceed, sign and return the agreement.
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