Will we be able to get a new mortgage deal?

zblake

Wondering if anyone can help or been in the same situation?!

My husband and I are currently both on DMP's, owe approx. £20k at the moment - started on the dmp in February 2011. However soon we should be in a position to pay off both dmp's in full.

We currently have a mortgage our house since 2008 which we have never been late with nor missed any payments on. Once we pay off our dmp's we need to move as we have a little boy of 2 and another one on the way. We are in a 1 bedroom house so space is getting tight!

My question is will we be able to get another mortgage? Cannot go to our current mortgage provider, BOI as we were told that they stopped offering mortgages last year. Or we will be better off renting our house out and moving into rented whilst our credit rating improves? Or selling our house, putting the equity away and renting again till our credit rating improves?

Our credit rating is currently 'very poor' for us both however we are hoping once we have settled all debts on the dmp this will improve.

Any help/advice much appreciated.:)

kingstreet

It's going to take time for you to be able to get a mortgage. The underlying credit issues which caused your DMP will still be there on your credit files for upto 6 years.

Once the DMP ends, what issues will still be there? Defaults? Judgments? How many, when and for how much?

The bigger the deposit you have, the better. A 90% mortgage is going to take a longer "rehabilitation" period than a 70% advance.

zblake

To be honest thats what we expect - I have one default for £1,597 in May 2011, and my husband has 4 for the following:-

1 x £3,375 - June 2011
1 x £1,576 - April 2011
1 x £1,233 - April 2011
1 x £650 - April 2011

Other than the above all other accounts are either settled or satisfactory. No CCJ's etc. Many thanks for your advice/time.

Dave_Ham

Hi,

Kings summary is perfect, but as a broker that almost exclusively deals with adverse credit even I would struggle to come up with something positive here.

You really will require paying these off and having a good 2 years of solid payments and credit files, before I would consider going to a lender.

As stated, the better deposit % you can achieve the faster/slower this process will take.

I wish you well though..

kingstreet

I can't add anything to what Dave has said. Bigger deposit and longer time before an application. It's all you can do...