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  • FIRST POST
    • tain
    • By tain 10th Jul 17, 5:33 PM
    • 463Posts
    • 588Thanks
    tain
    Getting a Mortgage after a Debt Management Plan
    • #1
    • 10th Jul 17, 5:33 PM
    Getting a Mortgage after a Debt Management Plan 10th Jul 17 at 5:33 PM
    I had a debt management plan which finished a little over 5 years ago, everything settled and paid up.

    The way it was structured meant that my last default on the DMP was over 6 years ago, which have now disappeared from my credit file as expected.

    As the DMP is an informal agreement with no legal basis, am I right in thinking that the only thing I need to concern myself with in relation to a mortgage is when the last default was on my file?

    I've been speaking to a broker who is fairly insistent that it's when the DMP ended that counts, but I can't see why that would be as it wasn't a legal agreement - nothing on my credit file says 'debt management plan'.

    By the last year of the plan, I was overpaying the agreed or minimum payments on the debts (the loans were always overpayments of my agreement as they were large, and as the debt on the cards reduced, the minimum payment eventually was less than I was paying), so there were no defaults in the final year.

    Back in March when the 6 years since my last default passed, my credit score jumped from about 500 to over 940. I know this doesn't mean squat, but at is certainly an indicator that there was a pretty clear date when my last default left my account.

    Obviously I'm now very concerned as I want to apply for mortgages immediately (I have the deposit and everything saved), but I've had this element of doubt thrown in by the broker.

    Any advice is greatly appreciated.
Page 1
    • Westminster
    • By Westminster 10th Jul 17, 6:59 PM
    • 760 Posts
    • 462 Thanks
    Westminster
    • #2
    • 10th Jul 17, 6:59 PM
    • #2
    • 10th Jul 17, 6:59 PM
    All my defaults had passed their 6 year anniversary by the time we picked up our previous mortgage. It is what appears on your 3 credit reference agency files that will dictate your outcome.

    Our DMP had only ended by a few months (maybe 4-5 .... in my mind this was due the expectation of being asked for the last 3 months bank statements).

    Obviously we were completely up front with our broker regarding our history and if at any point we were asked during the application process if we had previously had a DMP then we would have provided the details.

    As it was, the DMP issue did not come up (they did ask about IVA or Bankruptcy). I put this down to the skills of the broker in selecting the appropriate lender.

    In our case it was a high-street lender with market leading interest rate and a 5x salary multiple (although we did have a healthy deposit - somewhere between 25-30% based on equity on the house we were selling at the time)

    It appears your broker does not fully understand the DMP - I would be looking for another (and only entertain a broker who asks for current copies of all of your CRA files)
    Hi. Martin has asked me to tell you I'm a Board Guide on the following boards: Mortgages & Endowments, Mortgage-Free Wannabe, House Buying, Renting & Selling, Small Biz & Charities' MoneySaving and Charities.

    I'm a volunteer to help the boards run smoothly, and I can move and merge posts on there. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
    • tain
    • By tain 10th Jul 17, 8:48 PM
    • 463 Posts
    • 588 Thanks
    tain
    • #3
    • 10th Jul 17, 8:48 PM
    • #3
    • 10th Jul 17, 8:48 PM
    All my defaults had passed their 6 year anniversary by the time we picked up our previous mortgage. It is what appears on your 3 credit reference agency files that will dictate your outcome.

    Our DMP had only ended by a few months (maybe 4-5 .... in my mind this was due the expectation of being asked for the last 3 months bank statements).

    Obviously we were completely up front with our broker regarding our history and if at any point we were asked during the application process if we had previously had a DMP then we would have provided the details.

    As it was, the DMP issue did not come up (they did ask about IVA or Bankruptcy). I put this down to the skills of the broker in selecting the appropriate lender.

    In our case it was a high-street lender with market leading interest rate and a 5x salary multiple (although we did have a healthy deposit - somewhere between 25-30% based on equity on the house we were selling at the time)

    It appears your broker does not fully understand the DMP - I would be looking for another (and only entertain a broker who asks for current copies of all of your CRA files)
    Originally posted by Westminster
    Thank you so much for this. Even though we're totally confident in our convictions, it really put the willies up us to think we might have to wait almost a whole extra year.

    Do you mind if I asked what broker you used?
    • Westminster
    • By Westminster 11th Jul 17, 6:01 AM
    • 760 Posts
    • 462 Thanks
    Westminster
    • #4
    • 11th Jul 17, 6:01 AM
    • #4
    • 11th Jul 17, 6:01 AM
    There are plenty of good brokers out there.

    We used http://www.simplyadverse.co.uk

    Although I would suggest googling bad credit mortgage and phoning a few brokers to find one you like the sound of and that gives you confidence that they understand your situation etc
    Hi. Martin has asked me to tell you I'm a Board Guide on the following boards: Mortgages & Endowments, Mortgage-Free Wannabe, House Buying, Renting & Selling, Small Biz & Charities' MoneySaving and Charities.

    I'm a volunteer to help the boards run smoothly, and I can move and merge posts on there. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
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