Getting a mortgage after bankruptcy

M

MikeL2007

Registered User
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Hi all,

Does anyone have any experiencing applying for credit (specifically mortgage) in the ROI post bankruptcy? Rather than a business going bankrupt, I'm looking at it from an individuals angle.

I know what the process is like in the UK, in that you have to wait for a couple of years - but interested to understand has anyone experienced it first hand in Ireland.

Thanks
Mike
 
This area, obtaining a mortgage after bankruptcy, is a new area for Ireland. It will take time to see how lending institutions attitudes to former bankrupts evolves. The experience from England and Wales is that most lenders will entertain a mortgage application six years after discharge, when the bankruptcy record has fallen off the credit file. One lender, Nationwide, will entertain an application three years after discharge as long as the deposit is 20%. English/Welsh applicants also report better results using a broker than by applying direct.
 
Well, you don't have to wait six years in the UK depending on your personal situation you may
be able to get a mortgage within two/three years with a subprime lender,the difference is they
are well used to dealing with insolvency we on the other hand have no experience in it at all.

The problem is two fold, on one hand we have the way data is being reported post bankruptcy( Badly)
whilst Irish banks do not lend to anyone who has defaulted in the past their internal scoring system
appears to block any new applications for ever. I suspect its going to take a few years before they update
their systems accordingly.For example, at least 30% of all customers at one major Irish bank have
impaired credit files.
 
Thanks all for your comments. I have no income payment order post bankruptcy. My situation is that i gave up the family home and am now in rented accommodation where rent is reasonable enough. But now the house is up for sale. I would be in a position to pay back on a small mortgage but as Brendan says who in their right mind would give us bankrupts a mortgage and all I wanted to know was has anyone experienced going to lenders post bankruptcy.
 
I know a person who was declared a bankrupt c.1985 and was not discharged until 2000.Bank of Scotland then gave him a mortgage in 2002.
 
Sub prime lender are institutions that lend to people who would not get a loan from a mainstream lender.

So people who are refused for real reasons can access finance. The rate of interest is higher as the risk is higher.

Have you approached a broker to see about getting a mortgage. If you expand on your financial situation posters might contribute more.
 
Hi Joe 90

Thanks for the reply.

I'm in full time permanent employment and with what I'm paying for rent at moment would be the same as paying back a mortgage but now the owner has decided to sell and has asked would I be interested in buying. But before this happened I requested an ICB report just for my own piece of mind and I had a battle on my hands with one financial institute on it but I won the war to get it corrected.

So I made some enquiries and was told my local authority may be of sone assistance to me. Just wondering has anyone been in a situation like this.

Appreciate anyone's comments.

Thanks
 
Going forward said:
I'm in full time permanent employment and with what I'm paying for rent at moment would be the same as paying back a mortgage but now the owner has decided to sell and has asked would I be interested in buying. But before this happened I requested an ICB report just for my own piece of mind and I had a battle on my hands with one financial institute on it but I won the war to get it corrected.
Click to expand...

I suggest you go talk to your bank. And also start an account with the credit union. They are very approachable and they do do home loans. But I suspect you are not in a position to buy. Have you a deposit even? Can you please give us all the figures as it's impossible to figure out if you can even afford the house. Even if your rent is equal to what a mortgage amount would be.

I would be very wary of sub prime lenders. But having said that, if the figures are ok, then that is also an option. As is Joe90's advice about going to a broker. But please come back to us with what is available to see if people think it's a good idea or not.
 
Hi Goingforward,

We were discharged in July 2016, and have been to this point arguing with some of our debtors over the status of our ICB reports which were incorrect. Here is the output of our applications:

BOI - Happy to lend but asked us to wait 6-9 months after the point the items on our ICB report were marked as 'Written Off' or 'Complete'
AIB - 1 rejected application as our ICB report had a line with 'Account in Dispute' as the ISI hadn't paid said creditor their dividend after 24 months of paying an IPO. 2nd application submitted yesterday

Will keep you posted on how things go. We started a credit union account about 3 months putting a few bob in each week so they'll be the next stop. We have 10% deposit so are also looking for one of the famous 'exceptions' to the 20% deposit. BOI were happy to give us one based on our earning but the rawness of the ICB report was the issue

Mikel
 
Hi Mikel,

First of all thank you so much for your very helpful post above.

When I requested ny ICB report back some months ago after discharge in July 2016 I had alot of time consuming phone calls to make and emails to be sent to my 2 creditors as nothing had been rectified on my report. But in the end I got it sorted and requested letters of proof that I am no longer liable for any debt owing to them. Both accounts have now a W (written off) on them and removal date of mid 2018.

I have in the last few months went into my local credit union asking about a mortgage and its an asset loan they do with a high interest rate and maximum term of 15 years. Its been a long process and not even sure at this point if it will even happen. Everytime I go in with the required paperwork they look for something else. We now have to wait for my partner to complete his 6 month probationary period in his new employment which I believe is standard procedure.

We have been saving with them since beginning of this year and with what we save and pay in rent (as part of my bankruptcy was vacating family home) we have more than enough to cover a mortgage repayment each month.

Would you advise me at this point for myself and my partner approach Bank Of Ireland and AIB and see what they say. Even though our regular saving pattern is with the Credit Union.

Any advice would be much appreciated and thanks again for your helpful and hopeful post.


Going forward.
 
Going forward said:
Hi Mikel,

First of all thank you so much for your very helpful post above.

When I requested ny ICB report back some months ago after discharge in July 2016 I had alot of time consuming phone calls to make and emails to be sent to my 2 creditors as nothing had been rectified on my report. But in the end I got it sorted and requested letters of proof that I am no longer liable for any debt owing to them. Both accounts have now a W (written off) on them and removal date of mid 2018.

I have in the last few months went into my local credit union asking about a mortgage and its an asset loan they do with a high interest rate and maximum term of 15 years. Its been a long process and not even sure at this point if it will even happen. Everytime I go in with the required paperwork they look for something else. We now have to wait for my partner to complete his 6 month probationary period in his new employment which I believe is standard procedure.

We have been saving with them since beginning of this year and with what we save and pay in rent (as part of my bankruptcy was vacating family home) we have more than enough to cover a mortgage repayment each month.

Would you advise me at this point for myself and my partner approach Bank Of Ireland and AIB and see what they say. Even though our regular saving pattern is with the Credit Union.

Any advice would be much appreciated and thanks again for your helpful and hopeful post.


Going forward.
Click to expand...

Hey GoingForward

I'd say wait till Feb/Mar 2018 for BOI based on the feedback I got, but as soon as I have news from AIB I'll let you know.

As a matter of interest is your credit union in Dublin? I'd happily switch our savings to a CU if it meant getting a mortgage, regardless of interest/term!

Mikel
 
Hi Mikel,

My credit union is not in Dublin. Its a Midlands branch, thats all i can really say!!. Sorry. I will keep you posted of tbe outcome but since my post yesterday I have learned that their maximum term of repayment on a asset loan has gone from 15 ýears to 10 years. So much higher repayments but still affordable for myself and partner.

One lives in hope when we submit application again as to the outcome.



Going forward
 
Hi all,
We were discharged July 2016 and got a smallish loan from AIB in Nov 2016 and Credit Card also from AIB early in 2017. So now trying to build a new credit profile. However we spoke with AIB about a mortgage and there is no way we can meet the new mortgage lending criteria at the moment. We too have started saving with the CU so we'll see if they are in any way helpful. The local authority seems to only loan to first time buyers (as per government credit policy) but we are checking that out now too.
 
Hi all,

Does anyone know how long bankruptcy stays on your credit file for. (Not ICB report).

Have been told by ptsb that I will never get a mortgage through them having been a bankrupt.

Is this legal. Im just asking asking a question so please anyone don't shoot me down.

Thanks in advance.


Going forward
 
Very interesting thread, I would be surprised if any bank sanctioned a mortgage drawdown to a bankrupt, there is clearly an extra level of risk, not sure our tiny market will in the near term get over the past credit history.

I say go to a mortgage broker, they will assist if they can.
 
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