Will an applicant be refused permanently for his mortgage application if he has been declared bankrupt?

30-11-2016

Will an applicant be refused permanently for his mortgage application if he has been declared bankrupt?

Banks will upload a customer’s credit data onto the public credit data bureau in order to access the credit score of a customer.

The public credit data bureau will maintain the bankruptcy record of a mortgage loan customer for 8 years while the official record of bankruptcy will be maintained permanently within the court system. Therefore the bankruptcy history of an applicant will appear if search is conducted through the court system but not just through the credit data bureau.

As a result of one’s bankruptcy, it is difficult for an applicant to apply for a mortgage loan as prudent banks will not grant mortgage loan to an applicant that has been declared bankrupt before.

However some banks and finance companies may still accept mortgage loan applications from discharged bankrupt applicants but at a higher interest rate and on more stringent conditions such as the property must be for self use and the debt servicing ratio must not exceed 40%.

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