Mortgage and D.M.P

Saddler1975

Hi, Me and my new wife are thinking about wanting to buy a flat.

My debts are £800 credit card and £900 into my overdraught. I was made redundant in 2008 and fell way behind on my then credit cards and had default after default, I got help with the C.A.B and arranged a settlement figure with both which were paid off in 2009, these will both come off my file this year.

Equifax class my rating as very poor (repayment conduct Good)

Experian class my rating as fair bordering good.

My wife was made redundant and went into an D.M.P (I was not with her at the time and would have advised her to speak to Halifax directly and make arrangements with them) which still has 5 years remaining and owes approx £9000.

We are both 40 and have £13,000 which would go towards our deposit for our mortgage.

Would we get a mortgage? Think I may already know what the answer, could a broker help us in our situation?

Would it be best to use our savings to pay off her D.M.P?

Obviously with our ages we are leaving it slightly late to get back on the property ladder and paying the D.M.P now would set us back years as we are low basic paid Support Workers.

Thankyou.

superdon

More importantly than your mortgage question.....got your Wembley ticket sorted yet?

Saddler1975

superdon wrote: »

More importantly than your mortgage question.....got your Wembley ticket sorted yet?

:rotfl: Yes well no, ordered them yesterday and should receive them early this week

superdon

Saddler1975 wrote: »

:rotfl: Yes well no, ordered them yesterday and should receive them early this week

Good good

Thrugelmir

Saddler1975 wrote: »

Would it be best to use our savings to pay off her D.M.P?

I think you know the answer. Why would a financial institution advance further money when an individual has previously defaulted and not repaid what they already owe.

Don't lose your dream though. As tough as it maybe.

Saddler1975

Thrugelmir wrote: »

I think you know the answer. Why would a financial institution advance further money when an individual has previously defaulted and not repaid what they already owe.

Don't lose your dream though. As tough as it maybe.

Yes it is tough.

Would it be advisable to pay off the D.M.P now or just keep up with the monthly payments and continue to save aswel? And then in say 5-6 years time we may have a decent wedge then to put down for deposit.

Just to add we are moving into a new rented flat this month and they will want to sell in the future (already tried with no luck) and it is worth £90,000 so hopefully come the near future we may 'only' need a loan of £55,000-£60,000 and could have it over say just 15 years which would help considering our age. That is if we did not use our savings we have now to pay off her D.M.P.

ACG

When did she enter the DMP?
When is the last default dated on your experian credit reports?

Saddler1975

ACG wrote: »

When did she enter the DMP?
When is the last default dated on your experian credit reports?

2009 her DMP started.

Forgive me for me original post but I was a year out

Amex - Last default July 09 settled Oct 10

MBNA - Last Default March 09, Last payment and settled Sep 09

Thrugelmir

Saddler1975 wrote: »

Would it be advisable to pay off the D.M.P now or just keep up with the monthly payments and continue to save aswel? And then in say 5-6 years time we may have a decent wedge then to put down for deposit.

Frankly put, lenders aren't stupid. Many people attempt to use a DMP as an interest free loan. So the date of completion of the DMP may well influence any decision on a mortgage application. Lenders can choose their customers as available funds to advance are finite. The bar is set higher to weed out applicants.

ACG

There may be 1 or 2 lenders who will consider you.
Neither will be high street rates (although probably not a million miles out - I imagine sub 6% possibly less) but the potential is there. You are likely to need a 15% deposit and the DMP will be taken into account when assessing affordability.

Definitely definitely one for an experienced in adverse broker as a lot of brokers will just knock this back without putting in the leg work.

downhillfast

Saddler1975 wrote: »

2009 her DMP started.

Forgive me for me original post but I was a year out

Amex - Last default July 09 settled Oct 10

MBNA - Last Default March 09, Last payment and settled Sep 09

If those default dates are corrrect then they are due to drop off her credit file this year which is great - are they the only ones still on there?

If that is the case then I would be tempted to approach her creditors with Full & Final settlement offers and see if you can wipe out the DMP without digging into too much of your deposit... once the DMP is gone and the defaults drop off it would only be a case of rebuilding her credit rating and topping up your deposit savings.

Good luck :beer: