DMP V's IVA

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 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......

When reluctantly opting for a DMP 5 years ago and accepting and paying off all outstanding debts thinking this would improve my lending potential going forward, I’m struggling to understand the benefit of the less severe DMP route over a IVA (clean slate after 6 years) or even declaring bankruptcy......

Can someone explain the benefit of a DMP when trying to secure further borrowing post debt.....

Debtdrowninglondongirl

This is my worst nightmare! Did you manage to get a mortgage?

I was hoping after I pay my DMP it would give me the chance to buy.

Amazing you have saved so much though - massive congratulations

Timeforabreak

Dear Debtdrowninglondongirl,

Thanks for the post and i'm currently looking at sub-prime mortgage options accepting the rates and fees are not going to be what main highstreet prime mortagage products can offer... AAArrggghhhh!!!!

Hope things work out for you....

Debtdrowninglondongirl

Thanks!! Same to you!! Some mentioned Aldermore to me. It's not a high street bank but can offer a good line of alternative finance for a mortgage and may not be too high in interest. Loads of luck!!

fermi

What exactly is showing in your credit reports in relation to the debts that were part of the DMP?

Have they been marked as defaulted? If so what dates? Have they now been updated to show as settled or satisfied?

See: --> How long will my DMP affect my credit report?

sourcrates

Wait a while longer, after 6 years all the negative information from your DMP will drop off your credit file, have you checked your file to see whats there ?, i would.

Timeforabreak

Dear Fermi,

I had 6 accounts with 6 different creditors on my DMP with a combined debt of almost £18K. All accounts on both Experian and Equifax show 'settled' and were settled between 2010 and 2012.

What’s causing an issue I am now informed is one of the accounts states 'payment received as full and final settlement although the payment would not fully clear the balance' as a sub note against the account in my credit file. Following a bonus from my employer one creditor accepted less to settle the account - In hindsight I should have never accepted the lower payment offer. I also have two delinquent balances showing more >£1,000 which someone has also stated could cause me an issue.

Can I also ask if the 6 years that is often quoted as the time for defaults to disappear off your credit file from the start date of your DMP or when the accounts were eventually settled? It appears with an IVA it’s from the date when the IVA starts so I am hoping with a DMP it’s also from the start (in my case 2010) of your DMP and not when the account was settled (2012). 2010 means I could consider a furter credit/mortgage in 2016 and 2012 means i would need to wait until 2018 even with a low LTV based on a large downpayment.

Any feedback would be very much appreciated

Thanks

Timeforabreak

Dear Sourcrates,

Thanks for the valued suggestion and i just need to clarify one important point......

Do you know if the 6 years that is often quoted as the time for defaults to disappear off your credit file begin from the start date of your DMP or when the accounts were eventually settled? It appears with an IVA it’s from the date when the IVA starts so I am hoping with a DMP it’s also from the start (in my case 2010) of your DMP and not when the account was settled (2012). 2010 means I could consider a furter credit/mortgage in 2016 and 2012 means i would need to wait until 2018. This is a big difference for me.....

Thanks

Timeforabreak

Dear Debtdrowninglondongirl,

Thanks for the valued feedback and ill certainly try and have a look at what Aldermore can offer based on my 'post DMP black mark' :-)......

As a typical guide what would you consider as a reasonable rate for a sub-prime mortgage?

Thanks again

Sazzie23

Hi time for a break, yeah it's a bit rubbish.

I am mid term DMP and I did remortgage with my existing company with very little hassle once I fessed up and said I couldn't pay the endowment part. So it's not a straightforward no. No one else would consider me though, tried various brokers.

Re DMP on record, if you actually received a legal default, it's on your record for 6 years, if it's an Ap marker (arranged payment) it's 6 years from the last Ap. Have you checked Noddle, it's free.

The benefit of DMP for some people is that an IVA can cause trouble with work depending what you do as it's a legal 'default', whereas a DMP shouldn't affect things. Also it's considered that a DMP as it's informal has more flexibility of circumstances change (better or worse).
I don't think there is much benefit to your credit rating with either.