Buying house when OH on DMP?

Lilith1980

Hi all,

Currently, I have a total debt of £7k on a credit card. I finish paying for a uni course at the end of June, after which time I will be ploughing that money onto my credit card with a view to paying it off in about 18 months' time.

After this I want to start saving for a deposit for a house. I realise this is probably going to take a few years to get a decent deposit together, I just wanted to get some views regarding how our situation would impact on our plans.

The thing I am questioning is that my OH is on a DMP and has about £42k owing, one of those debts was a house repossession. When him and his wife separated she stayed in the house but did not keep up the mortgage payments. When it came to getting rid of the house she would not let him buy the house from her (think it was in negative equity at the time). She then went bankrupt and he was therefore left with the debt.

So anyway, I am guessing from this that if we wanted to buy a house it would only be possible if it were in my name, as I assume my OH's credit rating and his DMP would scupper any hopes of a joint mortgage? I also guess that his salary could not be taken into account either?

Would it be possible to have his name on the house in some form, so he had a share in it, even if his name were not on the mortgage? He would be paying me directly for half the mortgage repayments and I don't want him thinking I would fleece him for his payments toward the house if we were to split up (I know I shouldn't think like that but I am being practical lol)

Thanks in advance for your help

gardenlady_2

Yes, you would have to do it in just your name. Whilst you are saving make sure you have no financial association whatsoever- even utility bills should be kept separate- so that his credit rating does not impact on yours.

No, his name could not be on the deeds or anything. The mortgage company would not allow him to have any legal interest in the property whatsoever. In fact the opposite is the case- he would have to sign a document in the presence of a solicitor declaring that he has no legal right to any part of the property. That is because if they come to reposess they don't want someone trying to stop that because they have an interest in the property. Sad but true.

I don't know if there would be any way you could draw up something legal between you though.

somethingcorporate

If it was a joint mortgage previously then he would have been just as liable for the mortgage as his wife, regardless of whether he was living there. That is what would have been in the contract he signed.

Thrugelmir

Given the size of the debt why didn't your OH consider bankruptcy?

kingstreet

Lilith1980 wrote: »

if we wanted to buy a house it would only be possible if it were in my name, as I assume my OH's credit rating and his DMP would scupper any hopes of a joint mortgage? I also guess that his salary could not be taken into account either?

Would it be possible to have his name on the house in some form, so he had a share in it, even if his name were not on the mortgage?

Yes. A sole application only.

Yes. Your salary only.

No. Same borrowers as owners. You can sometimes have more borrowers than owners, but not the other way round.

Lilith1980

Thrugelmir wrote: »

Given the size of the debt why didn't your OH consider bankruptcy?

Thanks for all of your replies

OH has thought about bankrupcy but not looked into it properly. He has considered ringing one of those charities to talk through it further, - would him going bankrupt affect me/my credit rating at all? I just want to make sure at least one of us has an ok credit rating if buying a house is where we ultimately want to go.

I am guessing the bankrupcy forum on here would be a good place for us to start reading if this is the case?

Lilith1980

gardenlady wrote: »

Yes, you would have to do it in just your name. Whilst you are saving make sure you have no financial association whatsoever- even utility bills should be kept separate- so that his credit rating does not impact on yours.

Stupid question, but I am assuming having the council tax bill in both our names is ok? I know we have to as they need to know who's living at the property but this isn't going to affect me is it?

Hopelessly_Hopeful

Lilith1980 wrote: »

Stupid question, but I am assuming having the council tax bill in both our names is ok? I know we have to as they need to know who's living at the property but this isn't going to affect me is it?

Hi

To be legal you would both have to be listed but the bill could be in your name.

Bankruptcy can be a personal choice. Some debts can sound large but have to consider in relation to earnings and assets etc as well as lots of other considerations.

You'd certainly have a cleaner file quicker than on a DMP. Lenders have their own views on which they prefer.

Personally I wanted to pay 100% back so DMP was for me (not judging anyone else). Is giving me a headache re mortgage though and IFAs are ssaying easier to get them for bankrupts. Lunacy to me, as is the view that some have that it's an interest free loan, I've paid £5677 in interest since on the DMP!

Good luck in your quest

HHx

Lilith1980

Thanks - to be honest OH does not get stressed about money. He is paying £130 a month back I think as that is all he can afford at the moment. Whilst he says that bankrupcy would get things over with quicker, I don't think the DMP is stressing him out particularly.

In comparison to him, I only have £7k in debt and I hate it and can't wait to get rid of it!

Maybe it's more me getting caught up in it. OH says he'd like to own a house again but not sure that would be possible as I don't know how long DMPs can go on for?

Hopelessly_Hopeful

From what I have read you are very unlikely to get a mortgage whilst in the DMP. If he owes 42k and pays £130 it will be 26 years. My personal view is that it may not be appropriate to have a DMP over 7 years in length.

Have you considered saving and moving much later? You'd save a packet on interest. The mortgage calculator is very useful

HHx

Lilith1980

Yeah, I mean there's no rush. We are renting at the moment and in no hurry so saving for longer is totally feasible.

I was going to ask whether it would be an idea for me to help OH pay more on his DMP to get it sorted quicker? But then I thought, that my money isn't going towards saving for a house.