Mortgage whilst in a debt management plan

Brighterfuture83

Hi, this is the first time I have ever posted on a forum so bear with me!

I need some advice on gaining a mortgage whilst I am in a DMP. I got into trouble whilst at university and consolidated my credit card debts. This was incredibly stupid and I have since learned my lesson and consider myself to be very good at budgeting my money now. Since getting into trouble my aim has been to sort myself out and get in a position to own my own home.

Whilst I am still in the DMP, the last default I have is due to come off my file in May 2015 and I am also due to inherit enough money to use as a deposit for a house. I am hoping to have enough to clear my debts once and for all and still have a deposit but I am not sure yet.

My question is that once the last default has come off my file will I then be considered for a mortgage, even if I am still in the DMP? The rest of my credit file is fine and it makes more financial sense to me to get a mortgage than continue to pay rent. I have a husband who has recently become self employed so unlikely to be considered so for now we would be looking at a mortgage in my name only.

I plan to obviously speak to a mortgage adviser once my last default is gone and I have the inheritance but for now any advice would be greatly appreciated so that I can get an idea of my options.

Thank you in advance

Brightspark87

Hi

I think you may be best off speaking to a mortgage broker (independent). However, can I ask why you will still be in dmp with a house deposit? Surely you are better off paying all your dmp and then saving up for a deposit whilst rebuilding your credit report?

glentoran99

Brighterfuture83 wrote: »

Hi, this is the first time I have ever posted on a forum so bear with me!

I need some advice on gaining a mortgage whilst I am in a DMP. I got into trouble whilst at university and consolidated my credit card debts. This was incredibly stupid and I have since learned my lesson and consider myself to be very good at budgeting my money now. Since getting into trouble my aim has been to sort myself out and get in a position to own my own home.

Whilst I am still in the DMP, the last default I have is due to come off my file in May 2015 and I am also due to inherit enough money to use as a deposit for a house. I am hoping to have enough to clear my debts once and for all and still have a deposit but I am not sure yet.

My question is that once the last default has come off my file will I then be considered for a mortgage, even if I am still in the DMP? The rest of my credit file is fine and it makes more financial sense to me to get a mortgage than continue to pay rent. I have a husband who has recently become self employed so unlikely to be considered so for now we would be looking at a mortgage in my name only.

I plan to obviously speak to a mortgage adviser once my last default is gone and I have the inheritance but for now any advice would be greatly appreciated so that I can get an idea of my options.

Thank you in advance

Doubtful as you will have to explain your DMP payments and therefore the amount of debt you are in, If you are in a dmp you cant afford a mortgage

Brighterfuture83

Thank you for your reply. I am hoping to have enough to pay off the DMP as well as have a deposit for a house but if not I was just wondering if I would be in a position to obtain a mortgage even if I had just a short period of my DMP left, once the defaults have gone from my file. We are having to move in the new year for various reasons and I am reluctant to move to another rented house if there is any chance I could get on the property ladder. Especially considering that mortgage payments are likely to be less than rent.

Brightspark87

Brighterfuture83 wrote: »

Thank you for your reply. I am hoping to have enough to pay off the DMP as well as have a deposit for a house but if not I was just wondering if I would be in a position to obtain a mortgage even if I had just a short period of my DMP left, once the defaults have gone from my file. We are having to move in the new year for various reasons and I am reluctant to move to another rented house if there is any chance I could get on the property ladder.

Hi this doesnt make sense - either you will have enough to pay off your DMP or you won't.

The default will not show on your report after the 6 years therefore that is not an issue, on the application they may ask for bank statements etc which will (if recently finished) show payments to stepchange or whoever you are using. Therefore, I suggest that as soon as possible pay off the DMP and then look at buying a house c3 months after.

Brighterfuture83

Brightspark87 wrote: »

Hi this doesnt make sense - either you will have enough to pay off your DMP or you won't.

The default will not show on your report after the 6 years therefore that is not an issue, on the application they may ask for bank statements etc which will (if recently finished) show payments to stepchange or whoever you are using. Therefore, I suggest that as soon as possible pay off the DMP and then look at buying a house c3 months after.

Hi. Thanks for replying and giving some good advice. The point is I don't know yet as I don't have an exact figure that I will gain from the inheritance. I know I will have enough to either pay off the DMP or use as a deposit but it may not be enough to do both. If we weren't having to move then there would be no question that I would simply pay off the DMP first. I am just hoping to gain an idea of whether or not I could get a mortgage rather than having to rent again, if (worst case scenario) I don't complete my DMP first. I am seeing now that I may just have to clear the debts first and put up with renting for a while longer. So frustrating knowing that I could afford mortgage payments whilst paying my debts off, therefore investing my money rather than throwing it away on rent, all because I was an idiot when I was 18!