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 Mortgage only after DMP free for 6 years
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Springtime
Starting Member

2 Posts

Posted - 13 Mar 2014 :  21:49:26  Show Profile  Reply with Quote
Our situation is challenging to say the least. I am a contractor of 3 years with a healthy and lengthy contract. We are in year 4 of a 6 year DMP with Payplan, 6 defaults from the beginning of the DMP and 1 CCJ settled 2 years ago. We are a homeowner with an unblemished payment history over the last 11 years.
I understand our situation will preclude most lenders, so finding a mortgage for a new house is a long shot and that the repayments will be extremely high, but we are well capable of taking this hit for a year or two whilst we repair our credit.
We have had a number of 'advisors' who simply will not touch us. We think we have an advisor who uses a mortgage packager who, once proven our affordability, thinks he can source a mortgage for us. We are currently waiting for an answer on this.
However, I want to throw open one particular answer that we received from more than one advisor...."With a DMP you will have to wait 6 years after it has ended, before this mortgage company will touch you". This is incredible as this mortgage company offers "near prime" mortgages in spite of "CCJ's, Defaults, mortgage or secured loan arrears".
If only we had discovered that for 6 years after FINISHING a DMP we would still be treated like a financial lepor, then maybe we would have considered a bankruptcy or IVA.

Phil Corfield
Debt Management Expert



897 Posts

Posted - 14 Mar 2014 :  14:05:06  Show Profile  Reply with Quote
Hi Springtime & welcome to the Debt Management Plan Forum.

Congratulations on finding a possible mortgage provider who might be able to help you. Fingers crossed it comes good.

I think you have indeed found that, although many mortgage providers will not consider your application, some will, albeit they might be hard to find.

I think, based on media reports, mortgages are slowly becoming more available and the term "With a DMP you will have to wait 6 years after it has ended", I'm not sure that could ever be seen as a rule. Perhaps the cynic in me would believe that using that line is a way for a mortgage provider to kindly reject your application, as there may be a lot of work involved and little compensation should the application fail.

Best of luck anyway for the mortgage and becoming debt free in 2 years.

I am a CertDR qualified Debt Advisor and a Director of Bright Oak.
To contact me about a debt management plan or general debt advice please here:
   
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Springtime
Starting Member

2 Posts

Posted - 14 Mar 2014 :  19:28:52  Show Profile  Reply with Quote
Thanks Phil.

Well, not surprisingly the latest advisor also drew a blank.

In a bid to help others this is what have we learnt from the latest round of being told we are financially inept.

1) Being in a DMP can be disadvantageous because some lenders will not consider you (for 6 years after DMP) despite considering people with defaults, CCJ's and yes even mortgage arrears. In this situation we would have been better declaring bankruptcy or taking an IVA. I won‘«÷t give the mortgage lenders name, but I find this an incredibly narrow minded view, as taking a DMP is a signal of your seriousness to pay debts off in full.

2) Even if you find a lender who will accept your DMP, defaults, and CCJ's, if you have 1 single creditor showing as a late payment (+4 months) you will have to wait a further year after those late payments have been resolved. As many of you will know, a common tactic of lenders who agree to a DMP is to NOT place your account in Default but to show it in a state of late payments. So again, you might think that coming out of the DMP may rid you of one of the 'anti-mortgage' stigma's, but actually you will still have to wait 12 months before some of the 'near prime' lenders will even consider you.

On the positive side after 4 years of being in the DMP we are now in a Net Asset situation where we owe considerably less than we have in terms of our assets. So yes, we will be debt free within the 2 years we have left to run on the DMP. Our aim is to add to our 20% deposit (house equity) by overpaying the existing mortgage and move within the year once the mortgage companies catch up with reality.
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Debt Management Advisor
Debt Management Expert



366 Posts

Posted - 18 Mar 2014 :  09:32:11  Show Profile  Reply with Quote
Hi Springtime.

Some mortgage lender ask if you have ever been in an IVA or bankrupt in their application forms.

Whether or not that's still on your credit file (the six year period), it could have a long-term effect on your ability to source a mortgage that a completed debt management plan would not.

It sounds like you've got a good plan to move forwards from all of this over the next couple of years.

I am a CertDR qualified Debt Advisor. I advise on all of the available UK debt solutions. For advice on all of your options please click here:
   
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Mortgagesteve
New Member

4 Posts

Posted - 12 Jun 2015 :  12:19:54  Show Profile  Reply with Quote
Hi Springtime,
I specilaise in Adverse Credit Mortgages and know of six lenders that will look at applications if you are in a DMP. A few basic rules are;
1. the DMP must have been running a few years to see a payment history
2. no payments have been missed
3. your credit history since entering the DMP is clean
Some of these lenders will lend up to 85% and some will want the DMP to be coming to an end or cleared from a remortgage or equity from a house sale if you are moving. But some are happy to leave it running and treat it in the much the same way as a car loan or credit card debt and deduct the monthly payments from your income when they work out your affordability.
I have joined this forum today and would be happy to talk privately if that is allowed but will wait to hear from the Moderators.
Regards,

Regards,
Steve
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Donna77
Starting Member

2 Posts

Posted - 02 Aug 2015 :  20:47:56  Show Profile  Reply with Quote
quote:
Originally posted by Mortgagesteve

Hi Springtime,
I specilaise in Adverse Credit Mortgages and know of six lenders that will look at applications if you are in a DMP. A few basic rules are;
1. the DMP must have been running a few years to see a payment history
2. no payments have been missed
3. your credit history since entering the DMP is clean
Some of these lenders will lend up to 85% and some will want the DMP to be coming to an end or cleared from a remortgage or equity from a house sale if you are moving. But some are happy to leave it running and treat it in the much the same way as a car loan or credit card debt and deduct the monthly payments from your income when they work out your affordability.
I have joined this forum today and would be happy to talk privately if that is allowed but will wait to hear from the Moderators.
Regards,



Hi this is brilliant to know. My husband and myself have been on a dmp for around 5 1\2 yrs we were advised not to do an Iva because my husband is self employed. ( although this would probably be finished now). It has run great and worked for us. Problem now is our house isn't big enough now the children are growing. We are not able to pay the plan off any time soon as its to much and it's going to run for quite a few years yet. I know we can't do anything for a couple of years until another loan is paid off but definitely worth knowing it could be an option in a couple of years
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Mortgagesteve
New Member

4 Posts

Posted - 27 Jul 2017 :  13:35:53  Show Profile  Reply with Quote
Update 27th July 2017
I know of 9 lenders that would consider applications from people who are in or have been in a DMP.
Regards
Steve

Regards,
Steve
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