dmp and mortaging please help!

crazylady5

hiya i wondered if anyone could help?

were currently on a dmp owing about 37k and have a mortage been on a dmp for about a year now. but tbh were fed up with struggling so much with such a high mortage would we be able to get a new mortage if we sold our house, and paid off the debt? we are looking at moving closer to family and would be much cheaper and a clean start for us.. i just don't know how this will lie? were looking at paying dmp for 10 yrs!!!!!!!! who wants that around the neck for 10 yrs, i would rather sell up and start over?

please help me!
thank you x

matttye

Maybe but you're likely to have a crap rate as you'll most likely only get a sub-prime mortgage.

Stewart_78

You're going to struggle with that one I think. You're credit file is most likely trashed and will be for some years. One option may be to sell up, pay it all off and rent for a while? If you are worried how that may look, you can say you are looking for the right place. Get your file clean and you can look at buying again but it will take time.

DevCoder

You will really really struggle to get a mortgage even with the sub prime market to be honest. If you are in a DMP then most of your creditors would have already defaulted or arrangement to pay you.

If its a 10 year DMP and you are willing to sell beforehand then surely you'd be better to consider bankruptcy? BR knocks out a few mortgage lenders no matter the time but an arrangement to pay can last 6 years after your last payment into a DMP with some lenders.

DCFC79

Cut your spending, get a second job, eBay/car boot stuff, get a job closer to home can all help.

jamesd

It is very unlikely that you would be able to get a new mortgage for at least three or four years but all is not lost.

Your current mortgage lender may be willing to accept porting the existing mortgage. Since they will already be involved in some way in the DMP they will have both experience with you as a borrower and some incentive to help you to do things that might reduce your outgoings and allow you to repay your creditors more quickly.

So, first take a look at realistic property process and job opportunities and possible income levels where you're considering moving to. Then you can approach your existing lender about the possibility of porting while reducing both the amount borrowed from them and from your other creditors. Your mortgage lender would benefit from this in two ways: less of their money at risk and more free income for you after reducing your other debts, so you're less likely to have payment problems in the future.

With lower risk, keeping the same work, you might be able to move to a cheaper place near to where you are now. That would be even more attractive to your mortgage lender because of the elimination of the job uncertainty.

So, research and come up with some proposals. Maybe bounce some more specific ideas around here and perhaps come up with a proposal that reduces the costs and risk for both you and your mortgage lender.

New rules coming into effect from April 2014 will impose additional requirements and flexibility on how mortgage lenders treat "mortgage prisoners". Those rules allow mortgage lenders to waive mortgage eligibility criteria provided there is no increase in the amount of money being borrowed. Your business would still be very unattractive to other lenders because of the DMP but your existing lender can benefit from the ability to reduce the amount borrowed.

crazylady5

DCFC79 wrote: »

Cut your spending, get a second job, eBay/car boot stuff, get a job closer to home can all help.

none of that is even possible my husband works as a self emp carpenter and is literally up at 4.30 am and back again 8pm sometimes later, im at home with the 5 kids! all this debt started years ago when a job went bust and we were left 30k out of pocket! moving to be closer to family will help immesnsly and where my hub is working is usually around that area, he goes all over, and it pays better! believe iv'e tried all sorts but tbh we can either stay here or just move? i wish we'd of thought of it before starting the dmp but the way of the resission and stuff, there was no way our house was "worth enough" which is bull as my neighbour sold hers for "289" we def don't wanna go bankrupt either we have money in this house from a accident my husband had in his younger years, i just thought there might be another way out? seems there's no way out for normal people! shame we don't just rent and just say AH WELL and go bankrupt! i feel so gutted were trying so hard to do things correctly yet, wev'e just dug ourselves into a massive hole as there was nothing more we could do at the time but borrow! its a shame all the creditors weren't more careful, rather than keep on upping limits etc anyway i'm waffling on
i really appreciate all of your advice? so i guess my next step would be to call the halifax and see what they say?

thanks all so much x

jamesd

One thing to know about a DMP is that payments can be varied as income changes. So if he goes through a rough patch a reduction would almost certainly be doable. Also paying more during an unusually good time.

dancingfairy

It might help to put some numbers on the situation.
How much equity do you have in your house?
Have you considered an IVA?
Could you sell and rent nearer family while you get back on your feet?
Is the amount you paying into your dmp sensible? could you reduce the amount if you are struggling so much? (I appreciate this will mean that you are paying it back over a longer period though).

best of luck
df

crazylady5

i'm new to the whole thing tbh lol i'm not so good at maths lol i keep getting hounded by everyone who seems to just keep cold calling about a iva i just don't really understand them? how would that work again with a mortage and wanting to move? x

jamesd

Ignore anyone who cold calls about an IVA. They are just trying to get money out of you for their service. If you're on a DMP with one of the free debt advice charities, just stick with them. They would have told you if an IVA seemed best.

You can use the IVA form of insolvency to force creditors to participate in losing some of their money. A DMP can't strictly use the law to force those who don't want to. So sometimes, if creditors don't at sensibly, you might need to use an IVA to force some to. In an IVA if half of your creditors by amount owed agree to a plan the rest are forced to accept it as well. But IVA is insolvency, a less severe version of bankruptcy, so it has more of a negative effect on your credit situation than a DMP if the duration of the DMP is reasonable.

One of the things you can do if moving to a cheaper place, once you find out how much money is freed, is make full and final settlement offers to your creditors. It wouldn't be surprising if most of them agree to taking half of the money and writing off the rest instead of waiting for the end of the DMP. And of course this also helps your mortgage lender, because less debt means less chance of future trouble for them.