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01
Jun

How to Apply for a Mortgage After Bankruptcy

If you’ve been through the process of bankruptcy, you will know just how damaging it can be for your finances, credit score, and even your confidence within the market. However, damaging the experience is though, there is always a way out and we will try to provide some hope for you today. At Benson Mortgages, we regularly see people who have experienced bankruptcy and we tell them the following when attempting to get a mortgage.

 

Don’t Panic - First and foremost, lenders are now more understanding than ever and this is partially due to the global crisis from which we are still recovering four years after its end. If you approach any high street lender, you will probably be shown the door within an instant but this doesn’t mean you should give up. Instead, you should contact a mortgage broker just like our service here at Benson Mortgages.

 

Over the years, we have built some fantastic relationships with banks as well as private lenders. With no opinion one way or the other, we can provide you with totally impartial advice whilst finding you the very best rates in the market. After bankruptcy, lenders will try to take advantage of your circumstances so having a professional by your side will allow you to remain in the strongest position possible.

 

Deposit - After bankruptcy, your largest issue is likely to be the deposit and how much you can afford. Immediately after bankruptcy, most lenders will look for a 50% deposit regardless of the property and this is something not many can afford (not least after your most recent declaration). Therefore, it pays to wait and this should decrease to 30% after around two years before then falling to 25% after three years. If you really want to play the waiting game, the required deposit after 5/6 years can be as little as 5% if you build your credit rating successfully.

 

After the deposit, you then need to consider the actual mortgage payments themselves as this will determine how much money you can borrow from the start. As a typical example, industry experts say you can borrow up to four times your salary before tax. Once again, the waiting game could be important here because it allows you to make progress in your career, build up your credit score, and start saving some money. The longer you wait, the better deal you’re likely to find.

 

If you want to avoid all the waiting, get in touch with Benson Mortgages today and we will work with you to find the right solution. Many years ago, bankruptcy would cripple someone financially for decades. Although the process is still damaging and stressful, there are more solutions than ever before so allow us to be of assistance.

 

Building Your Credit Score - Although a large portion of the waiting game is…well, waiting, there are some things you can do to solidify your position. For example, the priority at the start should be to pay all bills on time and in full. As you do this, you become more reliable to investors and banks thus improving your score. After this, see if you can reduce your credit card balance and remove any debts. As you do this, you become stronger once again and you might just find yourself with a fantastic mortgage sooner than you thought.

 

There we have it, your guide to getting a mortgage after going bankrupt. Of course, you should always try to avoid bankruptcy at all costs so feel free to contact Benson Mortgages if you need help or advice and we will do all we can to keep you protected using our experience and unique set of skills.

by Benson Mortgages
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