Getting a mortgage whilst on a DMP?

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dandan29
dandan29 Posts: 5 Forumite
in Mortgages & endowments
I could really do with some advice on whether its possible for a first time buyer getting a help to buy mortgage (and this new 20% discount incentive the govt are bringing out). My only problem is that Im on a DMP and have been for the last 5 years. My remaining debt to date is approx £8500, ive rented for years and never missed a payment. I know i need to get on the property ladder but have always assumed its a no go area because of my credit rating and being on a DMP.
My parents have offered to pay the deposit, or even go in to the purchase with me, as they're now mortgage free.
This seems like an amazing opportunity for me but I'm still worried the DMP will hold me back. Does anyone know if its possible?
Any help appreciated as I need to make some big life decisions, and times ticking.
Thanks.

Comments

  • ACG
    ACG Posts: 23,727 Forumite
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    Help to buy isnt a 20% discount.
    There are 2 schemes:
    1) You put down 5%, the govt chips in with a 20% equity loan and a mortgage for the remainder.
    2) You put down 5% and take a mortgage out for 95%.

    1 is only available for new builds. 2 is available for new builds and non new builds.

    Option one I would be very surprised if there are any lenders who will do it. Option 2 there may be 1 lender who would consider it subject to everything else.

    One for a broker I think.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • dandan29
    dandan29 Posts: 5 Forumite
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    ACG wrote: »
    Help to buy isnt a 20% discount.
    There are 2 schemes:
    1) You put down 5%, the govt chips in with a 20% equity loan and a mortgage for the remainder.
    2) You put down 5% and take a mortgage out for 95%.

    1 is only available for new builds. 2 is available for new builds and non new builds.

    Option one I would be very surprised if there are any lenders who will do it. Option 2 there may be 1 lender who would consider it subject to everything else.

    One for a broker I think.

    Hi thanks for your reply.
    Well that is at least a small glimmer of hope.
    Are you able to state who the 1 lender who would consider a 95% mortgage whilst on a DMP. Secondly, are my chances increased if my parents go into the mortgage with me. Or at the very least they will be paying the deposit.
    Thanks again.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Borrow the money from your parents to settle your DMP.
  • ACG
    ACG Posts: 23,727 Forumite
    First Anniversary Name Dropper First Post I've helped Parliament
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    I cant say who the lender is as it could be seen as leading - I would suggest speaking to a broker.
    You could possibly get the mortgage in all 3 names, its unlikely to have a positive or negative effect unless you are struggling on the affordability front.
    Receiving the deposit as a gift can be a negative with some lenders, I dont think it is with the lender im thinking of but not 100% (To see it from the lenders view... you have been in a DMP, you now want a mortgage and have not saved up anything to put towards it - its not exactly the best combination ever, although as mentioned I dont think it will matter too much in this instance where the deposit comes from) - thats not me having a go, just explaining it from the lenders point of view.

    You will massively increase your chances if you use a competent broker - forget estate agent brokers, try to find one who specialises in adverse if possible.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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