Can you get a mortgage if you have been bankrupt and if so which lenders?

Business failure, redundancy, illness, and divorce are some of the reasons people get into financial difficulties which can sometimes lead to bankruptcy. Bankruptcy is considered the last resort for individuals in financial distress, giving them the opportunity to free them from their debts and have a fresh start, but the damage it does to a credit score is substantial.

If you have been made bankrupt, your credit report will contain information pertaining to this for at least six years from the date you were declared bankrupt. During this time, most mainstream lenders will consider you to be a high-risk and it could be extremely difficult to get a mortgage.

There may be lenders willing to help

Fortunately, bankruptcy is no longer the taboo it once was and there are ways to succeed in getting a mortgage with a specialist lender once the bankruptcy has been discharged. A discharge will usually take place 12 months after you have officially been declared bankrupt and after this time a specialist lender will consider you as a prospective borrower assuming your financial affairs are now in order.

While high street banks are likely to reject someone who has previously been bankrupt, especially if the discharge from bankruptcy is recent, a specialised lender may be able to help. Your chances of getting a mortgage typically improve the more time that passes since you were declared bankrupt and the greater the size of deposit you have available.

We provide expert mortgage advice to discharged bankrupts

As a whole of market mortgage broker specalising in complex cases, our experience in the market enables us to find the most appropriate lender for you. Most of the lenders who accept people who have declared bankruptcy only do business through brokers and they will consider each application on a case by case basis. Any prospective lender will want to be reassured that the reasons for bankruptcy are unlikely to recur and that you satisfy affordability criteria.

Example scenario

Craig owned a successful restaurant which he had been running with his wife for six years until a chain restaurant opened close by and led to a significant loss in trade. Craig then experienced financial difficulties due to the decline in customers which meant he struggled to keep up payments on his commercial lease. Things did not improve, and his landlord ultimately made Craig bankrupt.

Four years on from this unfortunate episode and his life is back on track, he has been working as a head chef in a hotel for just over three years and his financial affairs are in good order. He and his wife, who is now a primary school teacher, want to purchase a home and have a 20% deposit. It's likely Craig's bankruptcy will thwart any attempt to get a mortgage with a mainstream lender as when a credit check is undertaken the bankruptcy will show up and most mainstream lender are unwilling to lend to discharged bankrupts. Craig’s best approach would be to contact us. As a whole of market mortgage broker, we have access to lenders who are not dismissive of previous bankruptcy, who treat customers as individuals and make decisions based on their current circumstances and not their credit score.

This example scenario gives an indication as to the type of people we can help.