If you are looking to purchase your home under the Right to Buy scheme having been bankrupt, the good news is that there is no restrictions from the council preventing you from purchasing your home.
The difficult however may come from the Mortgage lenders as they are the ones assessing you for the Mortgage.
Getting a RTB Mortgage after Bankruptcy
As things currently stand, your options for purchasing your home with the RTB is pretty limited to either main stream lenders, most of which will only consider you once discharged for 6 years (there are a couple of exceptions who will consider you after 3 years discharged) but they are also subject to how your application scores. Alternatively there are the adverse lenders who typically charge higher interest rates and will only lend up to a maximum of 75% of the property value but could be lower if discharged less than 3 years.
A lot comes down to how long you have been discharged and your level of deposit. Between 0 and 3 years discharged your options are currently quite limited and expensive. Once you hit the 3 years discharged your options do start to increase and the products available do start to become cheaper.
Right to Buy & Bankruptcy in 2020
After meeting with a couple of Mortgage lenders who specialise in the adverse market early this year we are aware of 2 lenders coming to market with Right to Buy product this year. Both of these lenders plan to accept ex Bankrupts, one is looking at accepting applications 1 day after discharge from Bankruptcy and the other is looking at 3 years discharged.
This is great news as it not only gives us more options, it also gives us a broader spectrum. We will shortly have more than just normal lenders or really severe lenders with a cap on the LTV, the LTV should not be a major issue for people buying through the right to buy but it should come in handy for those looking to purchase under the Right to Acquire scheme instead where the discounts are generally capped at a much lower amount.
By the middle of the year, I expect us to have a couple of high street lenders for those with historic bankruptcy and the severe adverse lenders with rates over 7% as we do now, but also a few more options in the middle ground with rates from around 3.5% up to around 6% for those who either just fall outside of the high street up to those who are maybe have a slightly more recent bankruptcy but not necessarily bad enough to need a full on bad credit mortgage lender.
These lenders coming to market will see a big improvement for those who have been discharged from bankruptcy for less than 4 years in general, not just where the Right to Buy or Right to Acquire is involved.
How can we help?
We deal with these specialist lenders a lot more than most brokers. We have been pushing a few of them to launch a Right to buy/Right to Acquire product for around 18 months and 2 of them have been developing those products with plans to launch them this year.
I would like to think because of that we are in a really good position to help you obtain a Mortgage on a Right to buy or Right to acquire property if you have been bankrupt in the past.
Please get in touch, we will be happy to discuss your circumstances and give you some idea of what options are out there.