Mortgage After A DMP

Timeforabreak

Hello Forum members,

Please can you offer an advice?:A

After successfully paying off all my creditors via a DMP managed through CCCS in half the initial projected time:D, me and my partner are keen to get on the property ladder. After following the advice of the various posts on the internet we have saved a 10% deposited + 3 month mortgage payments + enough to cover all legal fees. After have a mortgage review with Halifax and NatWest (Apparently they have the lightest selection criteria for people with bad credit scores/ history) it appears Nationwide have claimed 6 late payments per month to my credit file for the duration of the DMP (3 years or 216 late payments:eek:) whilst the other creditors have added a much less harsh 'AP' (arranged to pay) to my file. Basically with this on my credit file I have been told nobody would provide a mortgage and both Halifax and NatWest obviously couldn’t progress with the application even though the affordability was well within our reach........

Does anyone have any ideas how I can get onto the property ladder again without waiting 6 years for my bad credit file to be gone?

Thrugelmir

An AP is a harsh marker when it comes to mortgages.

Unfortunately being in a DMP has consequences. Lenders aren't keen to lend further money when they've previously taken a hit.

One way of shortening the time period to obtain a mortgage is to build a far larger deposit.

ACG

Well done on paying it back early - you wont believe how much that will help going forward.

You really need to wait atleast a year or 2 from when the DMP was paid off and get to a 25-30% deposit.

Timeforabreak

Thanks for the valued feedback Thrugelmir and ACG and it looks like I need to continue the savings to improve my LTV ratio :-( whilst continuing paying someone else's mortgage off renting......

Dave_Ham

You need to get your Experian, Equifax and Call Credit reports, as it may have been reported differently on the different versions.

That said, with an AP or 6 you will not get a mortgage with a 10% deposit.

Depending upon when the accounts were officially defaulted and you will need to check, you may well have options with a 15% deposit on sensible rates as you are now out of the DMP.

Furthermore, the 5% needed could be gifted by family, saved up or you could just look at a cheaper property to start with.

Best of luck - well done on cracking the debt quickly.

mkmini81

I was on a DMP and paid it off in 2010 7 years early.... it is only now after 3 years i have been able to source a mortgage on HTB and that is mainly down to the defaults on my file.

Good luck!

Timeforabreak

Thanks for all the valued feedback posts and I now have a copy of credit reports as suggested by Dave Ham. It appears even with a significantly larger deposit/ down payment the main high street lenders still won't entertain me as my credit report is so bad. I am trying to work out the severity of each of the payment history statuses given from a late payment stating 6 late payments in per month for the length of the DMP (3 years) or a recorded AP (arranged to pay) for the length of the DMP and how they effect my credit report/status. The mortgage advisor suggested the reason they could not offer a mortgage is based on Nationwide registering 6 late payments per month for the duration of the DMP even though agreed payments were made on time for the duration of the DMP before I was in a position to pay the remaining balance which the advisor suggested was a little harsh and I should try and request this is changed to AP's for the duration of the DMP via Equifax. They felt if this could be changed then they could potential consider offering a mortgage even with a 10% down payment.

Does this make any sense as I have contacted Equifax and asked them to see if they can contact by creditor and request changing the continuous late payments red marks?

Ill keep you posted on how the progress develops......

Dave_Ham

You have as much chance of winning tonight's roll over lottery as what you do achieving a 10% deposit mortgage, with a recent DMP just finished.

The adviser is talking rubbish and just did not want to give you bad news, so gave you false hope which is worse.

As I said, 15% has more scope (although not with highstreet lenders) so address your energy here.

ACG

The late payments are showing because you defaulted on the original agreement. You then came to a separate agreement which ensured they did not take the matter further - this is one thing people tend to not realise when entering a DMP... partly down to the companies involved, they should explain it in my opinion.

That aside, as Dave says 10% is just not going to be enough. Any broker that says that is either charging a non refundable fee upfront and see you as a cash cow or theyre full of it.

Timeforabreak

Cant believe ive just won the lottery..... :-) If only......

Thanks for the sensible, realistic and practical advice guys and the saving has started to get a better sizeable deposit whilst trying to improve my credit rating/ condition.

Timeforabreak

Dear All,

After successfully completing my DMP in 3 years (3 years early) I have spent the last 2 years actively trying to improve my credit file and save up a good down payment against a house with the attempt to secure a mortgage with a high street lender....

With a high credit score (>950/1000) and a £70k down payment (30% of house value) I was a little surprised to find no high street lender will consider me for further borrowing via a mortgage and the only option would be a sub-prime' mortgage route with considerably higher rates and fees......

Is this really the only option left???