Mortgage After Old Full and FInal Settlements

fightingback4mykids

Hi
I had been reassured recently by a number of posts on here, and via a few brokers, that a mortgage would be likely for us even though we have historic bad debt. We were in a DMP, it is now completed. None of the resulting defaults show on our report as they are over 6 years old, we never had an Arrangement to Pay markers either. We have approx 35% deposit and are looking to borrow well within our affordability, i.e. when I do a calculator I am told we could borrow £500000, we want to borrow £220000. It would cost us 1/6 of our monthly income. I'm of course going to declare the DMP, I know I have to. However I've noticed a few posts over the last few days saying that Full and Final settlements will be a problem. About 5 years ago we did settle quite a lot of our debt via this method and a lump sum from my Father in Law. It was the only way we were ever going to clear the debt at that time. We now have twice the income we had then and much smaller outgoings. Our situation has changed, we did our best at that time. Am I and my family really going to be punished with no mortgage forever because of that? How much detail will the mortgage company want about the DMP given as I said we are no longer in it and it doesn't show in our Credit Reports?
I am really panicking now, we sold our house and are going in to rented based on reassurances from brokers, but now this worry has cropped up. Any help much appreciated from those in the know on here......

Let_Us_See

You will be fine. Due to your obvious anxiety I would recommend you let a good independent, whole of market broker take the strain.

fightingback4mykids

Oh thanks for the support, I think I just needed some immedaite reassurance!! I have spoken to 3 brokers, all who have some specialism in clients with bad debt. We had a perfectly valid reason for why we got where we were 7 years ago, and as I said our situation is now completely different. I have told the brokers about the DMP but I don't think I specifically said that a number of debts were discharged via Full and Final because I wasn't asked and I didn't think to say. When they did show on our files they did reflect this. However as I said they are no longer showing on our files so I'm not sure how much more information beyond saying yes, we were in a DMP but we aren't now, when asked we will have to give. I am looking at applying for a mortgage with a Building Society who were not one of our creditors, our deposit is just about to wing over to one of their savings accounts when the house completes. What our affordabilty was in 2006 hence the Full and Finals is a million miles from what it is now.

Thrugelmir

fightingback4mykids wrote: »

Am I and my family really going to be punished with no mortgage forever because of that?

Let's turn the situation around. You are in business. A debtor defaults and you accept 50% of the amount you are owed. A few years later the debtor approaches you as they wish to trade with you again. What would you do?

This is the scenario that the underwriters will consider.

fightingback4mykids

We aren't approaching any of our creditors from that time for a mortgage, and we never defaulted on our mortgage (which was with the Halifax). We defaulted on unsecured debt because my son was diagnosed with autism, I had to give up work to care for him because he was unable to attend school until we got his statement established to provide him with the support he needed there. The result of the strain we were under meant I also suffered a nervous breakdown. I will admit we were over commited, that was our own fault and a lesson we have learnt, but I don't really think the rest was something we could ever have anticipated.
That reply has now made me think we should delay the completion until we know for sure because we currently have a mortgage, just in a house that is far to far from my son's special school meaning he has to travel there in a taxi. I have waited 7 years to change that situation for him, I'm now feeling like I can't. Very depressing.

fightingback4mykids

And if this is the case how come discharged bankrupts get mortgages, which I have seen happens relatively often? They pay back much less than the 75% of debt, which is about what we paid back. Is making me wonder what the point in any of this has been if we are going to be penalised forever.

McKneff

Owning your own house isn't the be all and end all of your life.

People quite happily rent for a life time.

fightingback4mykids

My little boy needs stability, I would not like to put him through the potentially constant moving involved with renting. Am I really looking at never getting a mortgage because of this?? If so then think it is best to stay put, at least we have a mortgage on this house

ACG

Im assuming it could be my posts you have seen?

I have spent the last couple of weeks trying to place a DMP mortgage and feel like im becoming an expert on them!

The reason i have been saying they need to be cleared in full is because they have been recent - either still in them and they have come into money or just finished them.

Your scenario is slightly different in that yours is quite historic. I have no idea whether than makes a difference when placing it with lenders as i have never been tasked with researching it - but it might do.

I echo one of the other posts. Speak to a broker. There is no point in risking this and it getting declined, i would want to do my upmost it went through first time.

A lot will depend on the size of your deposit as a percentage... not how much you can borrow.

fightingback4mykids

Our LTV would be between 60 and 65% depending on what house we want to buy. Affordability wise we fit well in to the criteria, we take home £6000 per month, the mortgage would be approx 1/6 of this again depending exactly which house we go for. And yes, it is your posts, it is really really useful to read them I have to say as it is all very well what a broker says, but until they start the process how can they really know the outcome. So its great reading about people actually going through the process, I wish I could get to read more success stories, don't get to see them often. So you are saying in your recent experience it was people coming out of DMPs to satisfy mortgage criteria being told they must pay them in full? I know it is impossible for anyone to tell me for sure, I just think as much knowledge as possible can't harm us, although I am probably driving myself mad with it. I can't turn back the clock, it is what we needed to do all those years ago because I was coping with number 1 son and was pregnant with number 3. I know, again something that we could have controlled but we didn't and I was unwilling to 'do' anything to rectify that situation. This was all 2006/ 2007. I can't regret it now, to do so would take away the fact that if we hadn't done it we would probably eventually have lost our house anyway and that would have been even worse.

Thrugelmir

fightingback4mykids wrote: »

We aren't approaching any of our creditors from that time for a mortgage, and we never defaulted on our mortgage (which was with the Halifax). We defaulted on unsecured debt because my son was diagnosed with autism,

I wasn't commenting upon your personal circumstances. Lending money is a cold calculated business there's no sentiment. Default is a default how every it's arrived at. Primary cause is normally mismanagement of personal finances. Though access to easy credit in the first place has created problems for many.

Statistically people that default are more than likely to reoffend at a later date. That's down to human nature, and the genes of us as individuals. So by pooling data lenders can reduce their risk. Makes no difference who was defaulted on. As lenders are profiling the individual.