# Getting a mortgage after bankruptcy



## MikeL2007

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


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## Ciara Lee

I would be very interested in hearing about this too.


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## TLO

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.


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## Creditfail

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.


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## Going forward

Has anyone seeked a loan or mortgage since been discharged from bankruptcy in July 2016.


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## Going forward

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.


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## Clonback

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.


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## Going forward

Thank you clonback for your reply.


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## Joe_90

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.


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## Going forward

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


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## Bronte

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.



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.


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## Noregrets

I'm intrigued as to the outcome of this scenario as I may go through the same process myself .


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## thedaddyman

There is an interesting link here- although it is UK based so not sure if it is relevant to Ireland but it's possible banks may adopt a similar approach

http://www.onlinemortgageadvisor.co.uk/bad-credit-mortgages/mortgage-after-bankruptcy/

in general, I would have thought any bank would see someone just coming out of bankruptcy as a higher risk and the exact reasons for that bankruptcy could also be important.


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## MikeL2007

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


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## Going forward

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.


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## MikeL2007

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.



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


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## Going forward

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


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## Southeast

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.


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## Going forward

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


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## Palerider

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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## glic83

People in the UK have be successful getting a mortgage post bankruptcy, the system is different over there and there is a lot more lenders. Building up your credit rating would be the 1st step, small credit union loans, credit card and clear it each month would be a start. Will be very interesting to see how it goes here.


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## Fresh-Start

Going forward said:


> 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



New rules coming into force next year that a bank can only hold information on you for 6 years. But there are plenty of other banks out there...


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## Alan1962

I opened an account in our local credit union

I just brought my certificate of discharge and the account was opened in 5 mins


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## jayboy

Where do you get a certificate of discharge? I don't think I have received anything like this. I will have to have a look through my files


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## Fresh-Start

Following discharge your debts are written off, which means you no longer have a liability to repay them and the lender can't chase you for repayments. 
However the record stays on your credit report for five years from date of discharge. (That's the way its supposed to happen anyhow)


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## Fresh-Start

Is it just me or are PTSB the only bank refusing to correct an ICB report when pushed.
I'm more than 5 years post discharge and they are still reporting my account to the ICB as in arrears?
Its very frustrating, they are claiming that as the property is not sold they have the right to continue to report it. This makes no sense to me...


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## Anbhfuilcead

Post discharge from bankruptcy or the completion of full and final settlement towards a shortfall on the sale of a house? I've had it confirmed that all debts should be removed from an ICB report after 5 years, paid or unpaid.


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## jayboy

I do not know how this is possible. I might have to look at some alternative credit union in my area or around by my college and see can I open an account there. I don't really know what else to do in this sense. The only problem is if I open account and apply for loan straightaway they may check the ICB and find me on there until 2021.
I am gobsmacked that you can open an account and then apply for a loan and get it even before opening the account and speaking with loan manager about your bankruptcy. I would feel you were in a financially better off position to me as you might have had a job which was good wage so you could show repayment capacity for the loan but even at that its a strange situation. I have a different circumstance, I work part time at weekend but don't really want to mention too much on this forum on that. I am trying to move from where I am living at the moment to a bigger place but am caught for the deposit and have no way of accessing credit until 2021 according to ICB.
I am hopeful I will get job after college in May but that will take time to save up. I am at a bit of a crossroads at the moment on this.


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## Fresh-Start

Anbhfuilcead said:


> Post discharge from bankruptcy or the completion of full and final settlement towards a shortfall on the sale of a house? I've had it confirmed that all debts should be removed from an ICB report after 5 years, paid or unpaid.



Hi Anbhfuilcead,
I believe you are correct, who confirmed this for you?

I can find material from the UK but I can't find anything in Ireland so far...


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## MikeL2007

Hi folks,

Just to give an update on our situation.  As per the thread back in October, KBC seemed to react accordingly to a complaint from the FSO.  Eventually updating the status on that loan to withdrawn.

However my wife is now having a battle with PTSB through the FSO to get a loan updated to the correct status.  Having been declared bankrupt in 2014, my debts are listed as being removed in 2019 (correctly) but her PTSB debt having declared on the date are sitting with a removal date of 2022.  They refuse to play ball and are making excuses ranging from 'the official assignee delayed in transferring possession the property' to 'the property is not sold yet'. This despite the fact we know that the property is occupied.

We've found a favourable lender that is willing to consider a mortgage application from us having reviewed our situation but this could be one blocker too far for them.

Mikel


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## breakonthru123

MikeL2007 said:


> Eventually updating the status on that loan to withdrawn.



@MikeL2007 

At what date are banks meant to change your ICB etc. records to show mortgage loans as ‘withdrawn?’ After you’re declared bankrupt or after you exit bankruptcy?

And is that procedure a statutory obligation - or - just based on the whim of the particular bank you previously had a mortgage with??

Cheers!


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## Smashed123

This is a great post ,its great to see people talking about this issue. Im in the process of applying for a mortgage through a broker with my squeeky clean partner. Ive recently been discharged from bankruptcy and we're going to try find somone to lend to us if possible... my question is am i a 20% second time buyer house is gone back to bank or are we as a couple a 10% first time buyer .There seems to be a lot of gray area out there regarding each banks rules.


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## RedOnion

Smashed123 said:


> There seems to be a lot of gray area out there regarding each banks rules.


There's no grey area. There's legislation setting out the meaning - if either of you have ever previously had a home loan, in the republic, you're not a first time buyer.


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## AH2017

Very interesting post. I cant seem to even get a credit card from a bank latest attempt was june with ptsb.

Myself and my husband were declared in Nov 2014 discharged in July 2016. We too surrendered family home to the ISI and went renting. 

Fortunately we got a loan from our cu for a car but we had a guarantor and told cu everything. This was august last year.

I want to know how to get the bank to stop reporting to the icb that we are with arrears with mortgage which isn't the case.

Thanks in advance for reading


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## Dauhee

If you give a reasonable timeframe dealing with them direct and they don't cooperate, then would be to legally compel them unfortunately. Could look for ombudsman also


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## lff12

Creditfail said:


> 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.



Its not "for ever" - its for 5 years after the default, after which the record will be cleared.
Unless there is an error on the record, which does occur, and why you should always check your credit record.
Would presume that if it takes 6 years to discharge a bankruptcy, and there are no borrowings or new debts in the interim, the bankrupt would be like a new customer within 5 years of the last record being written off - so given that bankruptcy writes off debts, technically 6 years?


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## Brendan Burgess

Mike got a mortgage and has reported on it here: 

*Success! I got a mortgage 4 1/2 years after being declared bankrupt*


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