Apply for a Mortgage with DMP

Kalu

Hi All,

I am new to this forum and believe I am writing on the right one. Me and my husband currently are in a joint mortgage and want to move on a bigger house as we have another addition to our family. My husband started DMP with PayPlan three years ago and all our debts going to be over in another two years time. I have some savings and I can pay more towards our monthly mortgage instalment as my salary increased double since we had current mortgage. So we are thinking to sell our current house and move on to another big place as we can afford it. Problem is my husband is the main applicant on current mortgage and he will be the main applicant if we going to a new mortgage as he has a pretty much good income. We went to our current mortgage supplier to discuss what are the options available to us and they refused to lend anymore as he is still on DMP. We don’t think we will be able to get new mortgage from other lenders with this situation. I just want to know whether is there any other way can get a new mortgage or is it still worth put all my savings to settle all his debts. Then we need to wait another two three years to find a deposit for new palace. I cant work out what is the best way to move in to a new place. Four of us really struggling in this two bed small house. I really appreciate any advice.
Thanks
Kalu

kingstreet

The DMP makes this a non-starter.

Once it ends, the time you have to wait for a new mortgage will depend on the things shown on your husband's credit file. A default, for example, remains on file for upto six years from the date it was first registered.

The size of the deposit may reduce the impact of the adverse credit entries, but it sounds like you'll be struggling to get even 10%.

Pay off the debt as fast as you can, then start reducing your current mortgage by making overpayments.

The alternative is to sell and rent if you need somewhere bigger as a matter of urgency.

Kalu

Hi Kingstreet,.

Thank you for your reply. Yes I think only option is paying debt as soon as possible and clear the credit file first.
Thanks again
Kalu

nomoneytoday

If you can overpay the DMP, wouldn't it make sense to do so?

Kalu

Yes we can overpay DMP. But doing this we are going to end up with no deposit and still the credit report won’t be clear for another 4 ½ years. When we discuss with PayPlan they said there is a chance to take a new mortgage through them with at least 30% deposit. Currently we can afford 15% deposit with equity of current property.