Downsizing because of debt - can we still get a mortgage with bad credit?

suepoo1913

Hi

Apologies if this has been answered before - I have looked but couldn't see it.

We are thinking of selling our house to pay off some debts and would want a new house at a lower price/mortgage payments.

How would this work? Our credit record was fab but is now crap - we are on our own DMP with credit card companies so have defaults and all kinds.

When we sell our house do we pay off the mortgage and try and get a new one - or do we keep the same mortgage but it is just a different amount?

The (rough) figures are:

House is worth: £210000
Outstanding mortgage: £175000
Debt: £25000

Any advice would be greatly appreciated.

ps - although we have bad credit - we have never missed a mortgage payment (dont know if that makes a difference)

x

Conrad

Depends on the full details of your credit history, in particular how many payments missed in last 12 months and details of any CC's or defaults.

Lenders don't usualy take people on who will have a dmp continuing.

Dave_Ham

I deal in these types of cases every single day and from the limited information provided, I would think very carefully.

It is incredibly unlikely you will get a mortgage whilst in a DMP and not really enough equity and therefore deposit to pay off and make this go away.

Not to be taken lightly, I would look up an IVA and keep the property, pay an appropriate amount each month and have the certainty of a 5 year plan and not an ongoing DMP for however long.

Just an idea, you are incredibly unlikely to lose your home and may bring you out quicker. Take qualified advice though..