Mortgate whilst still owing creditors

Zenga

I had defaults on my account and this was cleared earlier this year after 6 years and my rating is now very good.

Even though the debts are no longer on my credit file, i still owe creditors £20,000 that i am paying the minimum amount on monthly through a debt management agency.

I and my partner are now however looking at getting a mortgage but i am concern that my debtors would transfer the debt onto the property.

How best do you reckon i deal with this issue as i do not have the capital to pay back the 20,000pds at this present time.

holly_hobby

Your creditors (as the debts are not time barred due to your acknowledgement), may indeed seek a charging order on your home(which now don't have the added hoop of only being able to proceed an unserviced CCJ) - nothing you can do about that its down to the courts whether its awarded, although it will be limited to your share of the property.

A way to circumvent would be to hold the property as tenants in common, and you have a minimal share.

Or you could use the deposit you have saved, and offer a full and final settlement to them, to repay your creditors what they are owed, and end it once and for all.

Hope this helps

Holly

Dave_Ham

Tin hat time..

There is a right answer here and the right answer for you.

The right answer is that you must have a deposit for a property and therefore you are prioritising your own needs, over that of creditors you have not paid. The mortgage would have to be affordable also, so therefore a DMP must look different on paper to that of your application.

The right answer for you will involve a using a mortgage broker and potentially this could be achievable, rightly or not.

Potentially a creditor may turn the default to a CCJ, which could be attached although a couple of the other sub forums on here could provide better information on this.

jacobtheamish

I'd be impressed if any lender will offer you a mortgage whilst your on a DMP. Good luck

maninthestreet

You can't afford to pay off the £20K debt, so how are you going to afford a deposit for the mortgage?

Miss_Marple_2

Even if the debts have fallen off your credit file, so they would not be seen by a mortgage lender, you will still be on application asked what your existing debts are and even if you try & lie about them ( not saying you would), the mortgage lender would see the payments going through your bank when they review your bank statements.

The terms of your DMP will be that you cannot take on additional debt, so you would be breaking the terms of your DMP as well.

My advice would be, that if you can afford it, make more than the minimum payments to your creditors and when they are paid off, you can put all the spare cash into your deposit.

Best of luck with whatever you decide to do

Thrugelmir

Zenga wrote: »

my rating is now very good.

Don't kid yourself. Not discharging your creditors in a prompt manner will come back and haunt you. Playing games doesn't beat the system, and most certainly does nothing to show credibility as a potential borrower.

amnblog

This is what I love about credit reports

Rule our lives, but wholly inaccurate in many cases

Zenga wrote: »

my rating is now very good.

..... i still owe creditors £20,000 that i am paying the minimum amount on monthly through a debt management agency.