Re-mortgage with DMP?

no_more_credit

Good morning,

I've had a good look around the forums but cant seem to find the answer to this one, maybe someone on here has been in a similar position and can offer some advice?

I got into a few financial difficulties about 3 years ago and had no choice but to take out a DMP on my unsecured debts. Without going into detail things are now looking better with two good wages coming in. The problem is I can't move forward. I've tried to remortgage and can't because I have a DMP, dispite passing affordability tests easily and having an LTV of more than 60%. It's very frustrating as I want to clear my DMP now, move forward and put this behind me. I'm starting to think I should have gone for an IVA which would almost be paid off now!

Does anybody know of a way around this apart from selling my house and starting over again?

Tixy

Hi and weclome

By remortgage do you mean borrow more than you currently owe?

As you are on a DMP I guess you probably have defaults on your credit file? and that these are still showin as unpaid?
You could try talking to an independant mortgage broker and taking copies of your credit files to see if they can think of any subprime lenders who would considering you.

Aside from that you will probably find it difficult.

How long do you expect to have left on your DMP at the current rate of repayment? have all/most of your creditors frozen interest?

If they have then it would be cheaper to stay on your DMP rather than pay interest on this debt by adding it to your mortgage.

Even if you cleared your DMP you will likely still have difficulty getting new credit for a while as the defaults etc will stay on file for 6years from the date of default.

Who is your DMP with? is it with a free provider/charity or is it a commercial company charging you a monthly fee?

robinc76

no_more_credit wrote: »

Good morning,

I've had a good look around the forums but cant seem to find the answer to this one, maybe someone on here has been in a similar position and can offer some advice?

I got into a few financial difficulties about 3 years ago and had no choice but to take out a DMP on my unsecured debts. Without going into detail things are now looking better with two good wages coming in. The problem is I can't move forward. I've tried to remortgage and can't because I have a DMP, dispite passing affordability tests easily and having an LTV of more than 60%. It's very frustrating as I want to clear my DMP now, move forward and put this behind me. I'm starting to think I should have gone for an IVA which would almost be paid off now!

Does anybody know of a way around this apart from selling my house and starting over again?

Hi there, this is one of the main reasons why I've stalled going on to a DMP. Are you saying you would like to remortgage (borrowing more) to pay off the remainder of your unsecured debt or just remortgage to get a better rate?

I've heard PayPlans' sister company Whose Lending are a good start but I haven't spoken to them as yet as I'm still debating on going to a DMP.

no_more_credit

Hi and thanks for the replies. I am with payplan so no additional fee's are being paid and interest should have been fozen but I am sceptical as I have little faith in any financial institution now.

I am trying to borrow more than I owe on my mortgage with a view of getting away from my DMP which would actually save me hundreds of pounds a month and start to re-build my credit file (which I haven't seen).

It is probably a simplistic view on my part but there will still be a one third equity in my property after a re-mortgage which must reduce the risk to any lender and importantly, I can afford it.

I have just spoken to Whose Lending and one of there advisors will be calling me back so we will see, however Natwest are offering a 5 year fixed at 4.2% which is the type of deal I am after.

I understand that it might be cheaper in the longer term to keep my DMP, but even with this service I still get letters and unwanted phone calls and to be honest I just want to be done with all of them.

It seems ironic that these are the same banks that couldn't offer me enough a few years ago and I was turning them down!!

no_more_credit

robinc76 wrote: »

as I'm still debating on going to a DMP.

I did not see this coming as I thought that there was a different policy with secured and un secured debt. The DMP was always intended as a temporary solution to a short term problem that a lot of us face. It seems it may have back fired on me. That said it was my only option at the time, you may have more options open to you?

Tixy

and interest should have been fozen but I am sceptical

I'd suggest you check to find out whether or not each creditor has frozen interest. If creditors are sending you statements it should be easy to see. If not request a statement from then. Don't assume that interest should be frozen, not all creditors do, and if they are not its worth writing to ask them to reconsider.

I am trying to borrow more than I owe on my mortgage with a view of getting away from my DMP which would actually save me hundreds of pounds a month and start to re-build my credit file (which I haven't seen).

I'd suggest getting copies of your credit files. Its likely most creditors will have entered a default on your credit file. That default will stay on for 6years from the date it was added, irrespective of whether you pay off early, or if you still owe money in 6years time.

So even if you pay off the DMP and your defaults are marked as satisfied you'll still find it hard to get anything other than subprime credit for a few years.

Even if you stay on the DMP your credit file will start to look better after 6years or so from the start of the DMP.

but even with this service I still get letters and unwanted phone calls

Have you sent your creditors letters to state that you want them to stop phoning you and for all future communication to be in writing? if not that will stop unwanted phone calls. The letters cannot really be stopped but these are useful to see what the situation is with your debts anyway.

anna_d_2

I am certainly not trying to sound harsh but with being on a DMP the lenders are unlikely to care too much about affordability as much as they are about your ability to manage what money you have.

You have to build a relationship of trust with lenders again - and many will not look kindly on you borrowing money to pay off a DMP when your interest/ charges etc have been stopped. (Assuming they have been).

It is crappy, but you may just have to bite the bullet and hold out for when you have shown that you can manage your finances better.

(Am not judging by the way... am not the best with money myself, but lenders are really only lending to the squeaky clean at the moment).