Mortgage, poor credit and DLA

fartootight

Hi, I have a complex situation I guess.

I am a home owner, we have some equity, should be enough for a deposit on another house. Our house is far too small for the size of our family and we have needed to move for years, but its got much more urgent with the children being much bigger.

The urgency has been added to with one of our children recently being diagnosed with a cancer that is having disabling effects. This is likely to be a life time condition. Meaning we now receive high level DLA for them, they are only Five.

As a result of a larger family, DLA and greater income from employment. We have much more cash than we used too.

However, we are still on a DMP and have a few other debts outside of the DMP.

We have been religiously paying off the DMP for a good six years and £35000 of debt is down to about £6000 and we have another £6000 outside of the DMP. This is now being paid off at a fast rate and it should be clear in nine months.

That's our situation.

The questions I have are what are the prospects of a mortgage at the present time? I am assuming bleak.

If the debt is cleared will our prospects improve immediately or take a while?

Typically a suitably sized house in the perfect location at the perfect price is available at the moment.

Also, with regard the DLA, many Banks take DLA as acceptable income, however given it is not myself but my five year old, will they still take it into account. I have read no, but to me that makes no sense given their age!

I am not too fussed if its a poor credit mortgage as I guess it can be remortgaged once our credit recovers.

Thanks in advance

Westminster

Not a direct answer to your query (although we were in a similar situation to you) but have you investigated a Disabled Facilities Grant (possibly changed its name but this is what it was called in 2007 when the council coughed up £25,000 to add an extension to our house to give an extra bedroom and wetroom). It is means-tested but if you don't have any savings - and I suspect you don't - then you could be eligible.

Thrugelmir

fartootight wrote: »

If the debt is cleared will our prospects improve immediately or take a while?

Will undoubtably take a while longer. Have you considered selling and renting for the foreseeable future?

Michelle2014

We are currently doing a mortgage application and the DLA we receive for our child is being taken into account by the lender and treated as income. I think we had to have an award that lasted for more than 5 years from now.

chanz4

the dmp may kill it, have you spoken to them also as a term of their agreement is that you wont take on more debt

fartootight

Westminster - I have looked at that grant at in the past. I was never sure it was an option. It may be however his mobility is such, that stairs are a problem for him. It may have be a better option utilizing this after we were to move, as we would still have a house heaving at the seams.

Thrugelmir - Yes renting is an option, though were reluctant, due to poor experiences with landlords.

Michelle2014 - Thanks Michelle its what I would have thought, we don't have an award for 5 years though. Initially just 18 months. He has a rare condition, and its near certain to be a life long thing. So the next award may well be for longer.

chanz4 - I am well aware the DMP is undertaken with the agreement of no more debt. But then again you still need to live under a DMP. Its academic anyway as I don't need the DMP as such anymore anyway, we are paying off well in excess of £1000 a month of our debts at the moment, so they will be gone before too long hopefully.

Michelle2014

Yes out first DLA award was for 2 years and our second award was for 6 years. Think they realised it was a long-term condition!