Getting a mortgage whilst on a DMP?

Jonny_Red

Hello all

I'm after some advice/guidance if anyone can help.

I entered into a DMP with the help of CCCS (excellent service... can't praise them more highly!) in September.

I may have the opportunity to buy a cheap house which will free up a substantial amount of money each month. If I bought the house I would easily be able to pay the original amounts that I had arranged with my creditors before falling into problems (I've worked out I could take a mortgage over 7 years and still have an extra £200 per month to put towards my DMP).

My question is how do I stand? Would I be able to get a mortgage whilst on a DMP?

Any advice/suggestions much appreciated.


J

~Beanie~

Virtually impossible.

Firstly your credit rating will be shot as it will show arrangements to pay your existing creditors so any potential lender will be unlikely to want to lend you anything and secondly, it is usually against the terms and condtions of a DMP to take out further credit until the plan is finished.

Jonny_Red

Thanks for the feedback. I'm aware of the conditions about taking on extra debt whilst subject to a DMP and figured that it would be hard to get a mortgage.

If I were able to do this though I my outgoings would reduce to a level where I wouldn't need the DMP as I'd be able to meet the demands from my creditors (to be honest, it would reduce my monthly spending by around £250 pounds). Had this opportunity come up three months ago, I would've been able to avoid the need for the DMP from the outset.

I guess what I'm asking is if its only virtually impossible, there might be a way. And if there is, what might that be?

If I couldn't get a mortgage in my name alone... could I get one with a family member as a guarantor? Could they get the mortgage and then me pay them the money... if I did this, would the house be mine or theirs and if its theirs, would I have to pay tax if it was later transferred into my name?

Any more info appreciated!

PS: Not sure if this changes things or helps... Have checked my credit rating with experian... it's currently listed as poor because of my recent financial details (with a score of 770 points if memory serves). My credit rating in the past has always been excellent as I've always paid my loans off and managed debts reasonably well. Being made redundant earlier this year has been the cause of my problems in the run up to the DMP.

Tixy

It will certainly be very difficult. What actually shows on your credit file? not the score thats not the important bit but the detail.
Have you creditors issued defaults? or are some showing as arrangements to pay? or just being in arrears by a couple of months.

Presumably you don't currently have a mortgage but rent?

And do you have a deposit towards the house purchase? or is someone gifting that to you?

I'd guess get copies of your credit file from experian and equifax and then arrange a meeting with an independant mortgage broker - to see if they can find a subprime lender who might consider lending to you.
But its likely you'll require a fairly high deposit and get a much higher APR than if you had a clean credit history.

StuTheDon

The deposit is key - without at least 10% of the purchase price you can forget it. And, even if you have that, it would beg the question of why it wasnt used to pay off debts.

I hate to sound harsh but if you have a history of not fulfilling your credit obligations, why do you think someone is going to lend you even more money to buy a house?