Since 2009 and the financial crisis, mortgage companies have had to make their lending criteria more robust amidst the accusations from some quarters that irresponsible lending was partly to blame for the crash. The regular income that you can prove is what your scope for borrowing will be based on, typically on the basis of it being 5 times your self employed or PAYE income.
The same basic rules still apply after your bankruptcy has fallen off of your credit file (usually in 6 years), but the chances are that if you’ve only recently begun enjoying a clear credit file, your score will be pretty low. This puts your application into the slightly complicated category, but it shouldn’t affect how much you can borrow too much, though you could be looking at a figure closer to 4x your gross income.
Another factor that can boost your gross income figure is if your partner, husband or wife also works, as their income can be included in a joint application. Mainstream lenders might not give full weight to the 2nd income, but it will certainly increase your base figure.
Unfortunately, if you’re applying via the traditional route and your combined incomes don’t total the amount you need, there won’t be much more you can do. However, you shouldn’t despair, as there are other routes you can take that will involve the use of more forgiving, less immutable lending criteria.
At Niche Mortgage Info, the mortgage brokers we work with have access to mortgage deals that take your whole financial picture to be considered rather than just your basic gross employed income. Should you be a company shareholder or a company director, any income derived from these sources will also be included in the calculations.
If you’ve been discharged from bankruptcy within the last 6 years (or even before that), there’s a more than average chance that you will have a less than perfect credit score. If so, there are steps you can take to help speed the process up. In principle, the longer it’s been since your bankruptcy was registered, the less trouble you’re going to have getting a good deal on your mortgage.
For more information on boosting your credit score, take a look at our post-bankruptcy credit file clean up page and to see how much you could borrow speak to a broker.
