Can you qualify for a mortgage with a Bankruptcy?

Yes, a mortgage is possible if you have previously been bankrupt but not whilst you are currently bankrupt. Typically, you would be discharged from a bankruptcy after 1 year (this would be called a ‘Day 1 discharge’ as it would become effective on the 366’th day).

A bankruptcy will remain on your credit file and the insolvency register for 6 years from the date of registration so lenders will be able to see that you were bankrupt in the past, and this may impact your ability to qualify.

To improve your chances of qualifying for a mortgage after bankruptcy, you should take steps to rebuild your credit by ensuring bills are paid on time, keeping credit card balances low. Adverse Mortgage Advisors have strong relationships with all the specialist lenders who have the experience of working with borrowers who have had a bankruptcy in the past.

Lenders will want to understand the circumstances which led to the bankruptcy and what steps have been taken since to improve your circumstances.  A larger deposit will be required to support your mortgage application whilst a bankruptcy is on your credit file.

It may be more challenging to qualify for a mortgage after a bankruptcy, but it’s not impossible. There are lenders that will consider day 1 discharged bankrupts, however more often lenders would expect your to be discharged from your bankruptcy for 12 months before they will consider your application. The deposit likely to be required at this point is 25-30%.

Once you have been discharged from your bankruptcy for 36 months a mortgage may be possible with a deposit as low as 5% providing there have been no further adverse or missed payments recorded against you since your bankruptcy.

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